The US Federal Reserve (Fed) intends to create an expert panel that will focus on the cryptocurrency sector, the agency's vice chairman, Michael Barr, has said.
He has acknowledged during a speech at the Peterson Institute for International Economics in Washington that digital assets could have a "transformative effect" on the financial system. However, he has noted that "the benefits of innovation can only be realized if appropriate guardrails are in place."
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Barr has added:
"Innovation always comes quickly, but it takes time for consumers to become aware that they could both gain and lose money on new financial products."
According to him, the group will help the Fed "learn from new developments" and follow the development of the industry. The official has added that regulation should be a deliberative process that strikes a balance between too much and too little oversight.
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Barr has also said that stablecoins are a cause for concern, as in his opinion, the assets in their collateral may be illiquid.