US regulators are now discussing the regulation of stablecoins, which are fiat-backed digital assets. Federal Reserve Vice Chair for Supervision Michael Barr believes that stablecoins should be subject to government oversight because they can be pegged to government-issued currencies, making them a form of private money.
Barr argues that stablecoins should be regulated to ensure financial stability and the integrity of payment systems. The Federal Reserve has recently launched a program called SR 23-7 to enhance supervision of crypto assets and stablecoins. While the US has not yet made a decision on whether to issue a central bank digital currency (CBDC), European counterpart ECB has started the preparation phase for a digital Euro.
