Jerome Powell, chairman of the Federal Reserve, reverses one of his prior positions on the relationship between CBDCs and stablecoins.
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In his renomination hearing on Tuesday, Powell suggested that CBDCs and stablecoins could co-exist without the former replacing the latter. The Fed Chair discussed the possibility of a Federal Reserve issued CBDC.
This was far less hawkish sentiment towards stablecoins than previously stated by Powell last year. In July, he argued that CBDC’s primary benefit would replace cryptocurrency-including stablecoins.
Powell has no desire to fully ban other cryptocurrencies, distinguishing the US regulator approach from China’s.
Meanwhile, stablecoins are a hotly contested subject among regulators. Both industry leaders and congresspeople pushed conflicting views on the topic in a hearing last month.
Even though the industry describes stablecoins as a compliment to the financial system, Maxine Waters stated that they could be a threat to the US dollar.