Federal Reserve Chairman Jerome Powell answered some questions about cryptocurrency and stablecoins during his testimony before the House Financial Services Committee on Wednesday

Powell then noted that a year ago the market cap of the crypto market was a lot higher.

Rep. Davidson promptly explained that the crypto market had some “volatility in large measure due to the lack of legal clarity.” He added that the committee aims to change this, noting that several bills are coming out, including one on stablecoins.

The congressman further stated that the U.S. Securities and Exchange Commission (SEC) has been active in the crypto space. He emphasized that the upcoming bills should provide clarity for SEC Chair Gary Gensler as well as Congress and industry participants. Last week, Davidson and House Majority Whip Tom Emmer (R-MN) introduced the SEC Stabilization Act to “restructure the Securities and Exchange Commission and remove Gary Gensler as Chair of the SEC.

Rep. Maxine Waters (D-CA) asked Powell about stablecoins during his testimony. She explained that she and her Republican colleagues have “proposed a stablecoin bill that will create 58 different licenses, with federal regulatory approval over only two of the licenses. The remaining 56 licenses can be issued by each state, territory, and D.C. with little or no federal oversight, regulation, or enforcement.

“Leaving us with a weak role and allowing a lot of private money creation at the state level would be a mistake,” Powell stressed. He also noted that “In all advanced economies, the ultimate source of credibility in money is the central bank.”