Stablecoins could "complement" other payment systems and improve consumer conditions, but needs continuous control, the United States Federal Reserve says.
In its November 2019 Financial Stability Report released November 15, the Fed highlights stable companies and their potential impact on the United States and beyond.
Bold: Unregulated stablcoins "pose risks"
Instead of rejecting the phenomenon, officials are eyeing potential use cases for the future, but insist that any stablecoin must comply with regulatory requirements.
"Innovations that promote faster, cheaper and more inclusive payments can complement existing payment systems and improve consumer welfare if properly designed and regulated," the report explains.
At the same time, the Fed warns:
"However, the opportunity for a stable payment network to quickly achieve global scale pose significant challenges and risks related to financial stability, monetary policy, money laundering and terrorist financing, and consumer and investor protection." [1[ads1]9659008] It rarely added official praise for Facebook's embattled venture concept, describing it as an example of Stabecoins, which "has the potential to quickly achieve widespread adoption."
it could pose a risk to financial stability, "it says otherwise.
Better Fractional Reserve Coins?
The report comes as the Fed is taking a growing interest in digital currency. As Cointelegraph reported earlier this month, the central bank is currently looking for a dedicated sphere of research for the sphere as China prepares to launch its state-sponsored digital currency.
At the same time, a former adviser to US President Donald Trump revealed last month that he plans to issue his own stablecoin, which is not fully backed by reserves.
US lawmakers have sought to add veterinarians to existing stablecoin offerings, particularly market leader Tether (USDT), which is currently facing a multi-billion dollar lawsuit that Bitcoin (BTC) figures have largely rejected.
This week, Fed leader Jerome Powell, meanwhile, admitted that $ 23 trillion of US government debt was no longer "sustainable," but that the consequences of not paying it out were not critical.