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Fed's Williams: Stablecoin Risks Not a Financial Stability Concern
New York Fed President John Williams said stablecoins are more about payments than stores of value and that he is less worried about the risks they pose to financial stability.
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New York Federal Reserve Bank President John Williams said stablecoins are more about payments than stores of value and that he is less worried about the risks they pose to the financial system. His remarks came during a workshop on market liquidity and functioning hosted by the New York Fed.
Williams said it remains early days on questions involving stablecoins and that he does not yet know how they will affect demand for reserves. The Fed's ample-reserves framework is designed to be flexible, he added, and can adapt to whatever impact stablecoins might have.
The comments mark a measured tone from a senior Fed official who has previously flagged stablecoin risks. In March, Williams said the GENIUS Act could help diminish those risks by providing a regulatory framework. The latest remarks suggest he sees the current set of stablecoin arrangements as limited in scale and more akin to payment instruments than to speculative assets.
Stablecoin issuers and crypto market participants have been watching for any shift in Fed rhetoric as the regulatory picture evolves. The GENIUS Act, which would create a federal licensing regime for stablecoin issuers, is still pending in Congress. Williams' view that stablecoins are not a financial stability threat could reduce the pressure on lawmakers to impose tighter restrictions.