Quarles warns regulators could stifle stablecoin innovation via rules ‘overkill’

WASHINGTON (Reuters) – Randal Quarles, the outgoing former regulatory chief of the Federal Reserve, said Thursday U.S. regulators may “unnecessarily” hamper innovation around stablecoins if they pursue recent recommendations put forward by a Biden administration working group.

Quarles, who will leave the Fed at the end of the month, said regulators must show “reasoned constraint” on monitoring stablecoins, adding banks should be allowed to engage with them once certain concerns around transparency and consumer protection are met.

(Reporting by Pete Schroeder)