Powell Says Private Coins Could Compete With Fed Digital Dollar
(Bloomberg) -- There’s room for privately issued stablecoins to exist alongside a possible central bank digital currency, according to Federal Reserve Chair Jerome Powell.
The Fed plans to publish a report on digital currencies in the coming weeks, Powell said at a Senate Banking Committee hearing on Tuesday. The central bank hasn’t said whether it plans to launch its own digital dollar akin to efforts underway in other counties such as China. The Fed and other U.S. watchdogs have previously said stablecoins need more regulation and should be issued by banks.
When asked by Senator Pat Toomey, the top Republican on the panel, whether there’s anything that would preclude a “well regulated, privately issued stablecoin” from coexisting with a potential Fed digital dollar, Powell said “No, not at all.”
Should the Fed issue its own digital coin, it’s not clear whether private tokens could compete. A recent report from the President’s Working Group on Financial Markets argued that Congress should give financial agencies authority that would subject coin issuers to bank-like rules. Stablecoins are a vital part of the crypto universe because investors often use them to buy and sell other digital currencies.
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