The Federal Reserve’s top bank watchdog, Michael Barr, says he’s “deeply concerned” about stablecoins without strong federal oversight.

Fed officials previously have expressed their unease about stablecoins, crypto tokens pegged to assets like the US dollar.

The regulator has provided guidance on crypto activities to the banks it supervises. But there are large risks when the agency lacks direct supervisory and regulatory authority, said Barr, the Fed’s vice chair for supervision.

“If non-federally regulated stablecoins were to become a widespread means of payment and store of value, they could pose significant risks to financial stability, monetary policy and …