Federal Reserve Chairman Jerome Powell said on Wednesday that one of the strongest arguments for the US central bank to issue a digital currency is that it may reduce the need for special alternatives such as coins Cryptocurrencies and stablecoins.
Asked during a congressional hearing whether the Federal Reserve's issuance of a digital currency would be a more viable alternative to having many crypto or stablecoins in the payments system, Powell said He agrees with this view.
According to Reuters, Powell added during the hearing before the US House Financial Services Committee that I think that might be the case, and I think that is one of the arguments being made in favor of digital currency. ...that, in particular, you wouldn't need stablecoins, and you wouldn't need cryptocurrencies if you had a US cryptocurrency - I think that's one of the strongest arguments in its favor.
Powell said Fed officials will broadly examine the world of digital payments in a discussion paper that may be published in early September. He described the paper as a major step accelerating the council's efforts to determine whether it should issue its own digital currency.
Powell added that he doubted crypto assets would become a major tool for payments in the US, but said stablecoins might get more traction. He added that more regulatory action is needed before stablecoins can have a greater role in the financial system.
We have a very strong regulatory framework for bank deposits, for example, or money market funds... that does not currently exist for stablecoins, and if It would have become an important part of the payments world, which we don't think will be for crypto assets but maybe for stablecoins, if we need an appropriate regulatory framework.
