Powell did not rule out that stablecoins could compete with the Fed’s digital dollar.

However, a piece of information provided yesterday by Powell drew attention: Pat Toomey, the main Republican who was yesterday in the Banking Committee, raised the possibility that a stablecoin “well regulated and issued by the private sector” can coexist with a digital currency designed by the Fed. Powell didn’t rule it out.

A recent report from President Joe Biden’s Task Force recently known argued that Congress should give authority to financial agencies in a way that would regulate currency issues in a similar way to banks.

The critics

A day later he already had his main detractor. Tom Emmer, a member of the US House of Representatives introduced a bill that prohibits the Federal Reserve from issuing a Central Bank digital currency directly to people. Some of the reasons given were the following:

• Seeks to ensure financial privacy, maintain dollar dominance, and cultivate innovation
• Digital currencies that do not adhere to those principles could allow an entity like the Federal Reserve to “become a retail bank, collect personally identifiable information about users, and track their transactions indefinitely.”
• Hacking risk: “This model would not only centralize financial information leaving it vulnerable to attacks, but could also be used as a surveillance tool.”
• FED Authoritarianism ?: “Requiring users to open a Fed account to access a US CBDC would put the FED on an insidious path similar to China’s digital authoritarianism”

“It is important to note that the Fed does not have, and should not have, the authority to offer retail bank accounts. Regardless, any CBDC (Central Bank Digital Currency) implemented by the Federal Reserve must be open, permissionless, and private. This means that any digital dollar must be accessible to all, transact on a blockchain that is transparent to all, and maintain the privacy elements of cash, “Emmer said.

“To maintain the dollar’s status as the world’s reserve currency in the digital age, it is important that the United States leads with a stance that prioritizes innovation and does not aim to compete with the private sector.”, ended.