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The Fed could issue stable coins alongside the digital dollar, as Powell suggests

Photo Credit: Chicago Council on Global Affairs

On Jan. 11, Federal Reserve Chair Jerome Powell said to Senate legislators that nothing prevents privately produced stablecoins from coexisting with a prospective Fed central bank digital money (CBDC).

Sen. Pat Toomey (R-Pa.) questioned Powell at his confirmation hearing for a second term as Fed chairman whether there was a place for a future Fed-issued digital currency to coexist with a privately issued stablecoin.

What about a central bank digital dollar approved by Congress and pursued by the Fed is there anything that ought to preclude the introduction of well-regulated, privately issued stablecoins alongside it?”

The Federal Reserve has not agreed to introduce a digital currency, though it is looking into it. The Fed has increased its efforts in this area as a result of many countries changing their regulatory frameworks for crypto-assets and aiming to roll out central bank-issued digital currencies.

12 Jan 2022


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