Fed Chair Jerome Powell Argues private stablecoins can co-exist with US CBDC

On Jan. 11, Federal Reserve Chair Jerome Powell told Senate legislators that nothing prevents privately issued stablecoins from coexisting with a prospective Fed central bank digital currency (CBDC). Jerome Powell Confirms Fed-issued Digital Currency Is Underway Sen. Pat Toomey (R-Pa.) asked Powell during his confirmation hearing for a second term as Fed chairman whether there was place for a future Fed-issued digital currency to coexist with a privately issued stablecoin. Toomey asked: “Is there anything about that that should preclude a well-regulated, privately issued stablecoin from coexisting with a central bank digital dollar if Congress authorizes and the Fed pursues a central bank digital dollar?” Powell said the Fed would publish a study on digital currencies soon at a Senate Banking Committee meeting earlier this week. Senator Pat Toomey, the top Republican on the panel, questioned Jerome Powell during the session. Powell responded, “No, not at all,” when asked if a CBDC would exclude the formation of a “well regulated, privately issued stablecoin.” While other countries continue to create their own CBDCs, the US monetary authority has yet to make an official announcement about plans to introduce a digital dollar. Despite Powell’s remark, it’s unclear how private tokens would compete if the Fed issued a digital currency. USDT, the largest stablecoins by market cap, stan...