Federal Reserve Waller: Non-banks and banks should be allowed to issue compliant stablecoins, which have the potential to maintain the status of the dollar

Federal Reserve Governor Waller stated that stablecoins have the potential to "maintain and expand" the international status of the dollar, although their fluctuations will depend on reliable business use cases and a set of coordinated rules. In his prepared remarks for a San Francisco conference, Waller said: "The stablecoin market would benefit from a U.S. regulatory and supervisory framework that directly, comprehensively, and strictly addresses stablecoin risks. It should allow non-banks and banks to issue regulated stablecoins, and consider the impact of regulation on payment patterns." He added: "The emergence of different global stablecoin regulatory systems could lead to domestic and international regulatory conflicts. This scattered regulation may make it difficult for US dollar stablecoin issuers to operate globally." Waller pointed out that state regulators have always been "key participants" in the development of the stablecoin market; some states are developing laws or finalizing new regulations. "State regulations may conflict with each other which could prevent all states from using the same stablecoins thus reducing their scalability," he noted while also pointing out that there is a risk of runs on Stablecoins. Recently, bipartisan senators proposed legislation providing a regulatory framework for Stablecoins including requiring one-to-one reserves compliance with anti-money laundering laws. The House Financial Services Committee has released draft legislation for discussion (Bloomberg).