Federal Reserve's Barr warned of the risks of stablecoins and emphasized the need for strengthened regulation and reserve review.

Federal Reserve Governor Michael Barr stated that the development of stablecoins must be built on strict regulation, warning that a lack of effective constraints could repeat the "long history of problems caused by private currencies." In his speech, Barr pointed out that while the GENIUS Stablecoin Act has provided an initial regulatory framework for the industry, the key lies in subsequent enforcement, including continuous monitoring of reserve assets and mechanisms to prevent illicit use. He emphasized that stablecoins can only be truly considered "stable" if they can be repaid at face value under various market conditions. The liquidity and security of reserve assets are particularly critical when market pressures or increased risks to the issuers themselves intensify. Furthermore, Barr pointed out that stablecoin issuers have an incentive to increase profits through higher yields, which could lead them to take on higher risks in reserve asset management, thus posing a potential threat to financial stability. Currently, stablecoin regulation remains one of the major points of contention in US crypto legislation, and has also affected the progress of related legislation to some extent.