Christopher Waller, a Federal Reserve governor, believes stablecoins could help strengthen the role of the US dollar in global finance.
Speaking at a conference in San Francisco on February 12, he emphasized the need for clear regulations to allow banks and other businesses to issue stablecoins while addressing potential risks.
Waller described stablecoins as a useful development in digital finance, particularly for improving everyday and international payments.
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He noted that the market has become more established but still needs a solid regulatory framework, saying:
This framework should allow both non-banks and banks to issue regulated stablecoins and should consider the effects of regulation on the payments landscape, including competing payment instruments.
Waller also expressed confidence in private companies’ ability to develop stablecoin solutions, stating that businesses and consumers would benefit most if the private sector took the lead while regulators ensured fair rules.
He acknowledged that stablecoins already serve valuable purposes, such as offering a stable store of value in crypto trading, providing dollar access in countries with high inflation, and facilitating international transactions.
At the same time, he pointed out ongoing challenges. One major issue is the lack of consistent regulations across states and countries, which creates uncertainty. He also mentioned risks such as stablecoins losing their peg to the dollar, which could cause problems for users.
Waller concluded by saying the future of stablecoins will depend on how well they meet consumer and economic needs. He noted:
The stablecoin market will grow or diminish on the merits of their benefits to consumers and the broader economy.
Meanwhile, US Congresswoman Maxine Waters recently urged lawmakers to support an earlier stablecoin bill instead of the new legislative proposal. Why? Read the full story.
