Opinion: Federal Reserve Vice Chair for Supervision Resignation or Not Successful, Regulatory Relaxation Unlikely to Make Significant Progress This Year

BlockBeats News, January 7th, TD Cowen's Washington Research Group's Jaret Seiberg said that the resignation of the Federal Reserve's Vice Chair for Supervision, Quarles, is "not as much of a win for the big banks as it might seem on the surface."

Seiberg stated in a report on Monday, "With the Democratic Party set to hold its majority on the Federal Reserve Board until early 2026 and the need to confirm a new regulatory agency, we struggle to see significant progress this year on easing regulations."

Quarles has called for regulation of stablecoins over the past year, stating that stablecoins "borrow the trust of the central bank, and the Fed is very eager to ensure that any stablecoin issuance operates within an appropriate federal supervisory framework so that they do not threaten financial stability or the integrity of the payment system," Quarles said at a meeting in Washington, D.C. in October 2023.

For years, legislators have been working on bills to regulate stablecoins, but the crux lies in how to allocate regulatory authority between states and the federal government. (The Block)

In news yesterday, Federal Reserve Vice Chair Quarles announced that he will resign from his supervisory position on February 28, 2025. The Federal Reserve's statement said that Quarles will continue to serve as a Fed governor but does not intend to participate in major rulemaking work until his successor as Vice Chair is determined. Quarles said in the statement that the "controversy" risk associated with his position may distract the Fed's attention.