- The Fed is looking keenly at stablecoin regulations as it works closely with other global banks.
- The Fed Chairman, Jerome Powell, says that the Fed prefers to be right and not quick with a CBDC.
- Ripple presents the XRP Ledger for stablecoin and CBDCs’ issuance.
The Chairman of the United States Federal Reserve, Jerome Powell, says that the ongoing work regarding stablecoins is of “very high priority. Moreover, the institution has been working on “better regulatory answers for potential global stablecoins particular,” during a webinar held on Thursday.
The Fed’s attention shifts to CBDC’s and stablecoin regulation
According to Powell, central bank digital currencies (CBDC’s) and stablecoins bring with them risks that have to be mitigated. The Fed is working hand in hand with other central banks worldwide because it is aware that stablecoins could become significant overnight, and it must be ready as a regulator.
So that’s been a high-level focus, and that will continue to be a high-level focus because they could become systemically important overnight, and we don’t begin to have, you know, our arms around the potential risks and how to manage those risks and the public will expect we do and has every right to expect that.
The Fed still maintains that there is no rush for developing a CBDC. However, Powell confirmed that they “going to look at it very, very carefully.” On the other hand, the regulator is “determined to do this right rather than quickly, and it will take some time — measured in years rather than months.”
Ripple pushes XRP Ledger for CBDC’s and stablecoins’ support’
Ripple, a San Francisco-based Blockchain Company, is ready to dive into CBDC’s race using its XRP Ledger (XRPL). According to Ripple, banks can issue stablecoins on XRPL due to its “unique, fungible token functionality called Issued Currencies.” Ripple added that:
Issued Currencies is designed to be the ideal stablecoin platform, providing simple but rich management functionality for the issuer that makes it easy to create, issue, and manage any asset – including stablecoins.
Meanwhile, XRP is trading at $0.29, with the upside capped under $0.3 for several days. Attempts to break above this critical level have been unsuccessful. For now, the path with the least resistance appears to be downwards.
XRP/USD 4-hour chart
XRP will have to break out of this consolidation for any significant price action to occur. Gains above the 50 Simple Moving Average and $0.3 would pave the way for XRP to rise to the 200 SMA and perhaps test $0.4.
On the other hand, a daily close below $0.9 will see XRP/USD extend the bearish leg to the 100 SMA. If selling pressure intensifies, the price may drop to $0.25 (early this week’s support) before a reversal occurs.