During testimony before the U.S. Senate Banking Committee earlier today, Federal Reserve Chair Jerome Powell was asked about central bank digital currencies (CBDC) and stablecoins. He said he was undecided about a central bank digital dollar and believes stablecoins need regulation.
Senator Pat Toomey noted that during yesterday’s Congressional hearing, Powell stated that if there were a CBDC there would be no need for cryptocurrencies and stablecoins. The senator asked whether the reverse was also true, that with crypto and stablecoins there is no need for a CBDC.
Powell clarified that he had simply stated that a CBDCs impact on crypto and stablecoin activity was one of the arguments in favor of a CBDC. “I’m legitimately undecided on whether the benefits outway the costs or vice versa on a CBDC,” he said. “I would agree that the more direct route would be to appropriately regulate stablecoins, which we don’t do right now.”
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