US Fed Chairman Reassures Openness to Stablecoins

The latest news comes at a dark time in the market, but could bring some hopium to hodlers in the crypto sphere.

Fed Issues Positive Report on Stablecoins

United States Federal Reserve (Fed) Chairman, Jerome Powell, reiterated his support for private stablecoins provided that have proper regulation. The news out of the Fed this week shows a bullish turn towards crypto despite the recent market crash.

The recently re-elected Powell spoke at a press conference on Wednesday, a day before the Fed released a much-anticipated 40-page report on the role of central bank digital currencies (CBDCs) and their affect on the US dollar.  Chairman Powell preempted the report with his supporting comments, showing that the Fed could finally be coalescing on a regulatory framework. 

“The introduction of a (central bank digital currency) would represent a highly significant innovation in American money,” the report writes. “Broad consultation with the general public and key stakeholders is essential.”

Source: Fed Chairman Jerome Powell

The report’s release begins a 120 day commitment period for the Fed to seek public comment as there remains a lack of consensus on the benefits of stablecoins. The Fed still takes no formal position on CBDCs, and the US is still likely a few years away from implementation of one. 

“A CBDC could also pose certain risks and would raise a variety of important policy questions, including how it might affect [the] financial-sector market structure, the cost and availability of credit, the safety and stability of the financial system, and the efficacy of monetary policy,” the study adds.

The Federal Reserve has the onus to encourage innovation and promote prosperity amongst the American people. The latest report is the first step and a welcoming sign to a potential openness to regulation in 2022. 

The Federal Reserve whitepaper, “Money and Payments: The U.S.Dollar in the Age of Digital Transformation,” is available here

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