US Federal Reserve Governor Christopher Waller has called for a regulatory framework to allow banks to issue dollar-pegged digital currencies, which could expand the reach of the US dollar. He described stablecoins as “synthetic dollars” that can open up new payment possibilities and drive down costs.
Waller believes the private sector can develop innovative solutions for stablecoins, but needs clear regulations to operate within. The proposed framework should allow non-bank and bank issuers to create regulated stablecoins, while also considering the impact on the payments landscape.
The Fed governor acknowledged the benefits of stablecoins, including providing a safe store of value, access to US dollars, and cross-border payments. However, he noted that there are challenges, such as a lack of clear regulations, fragmentation between state and international rules, and the need for balanced regulation that ensures safety without stifling innovation.
Waller expressed confidence in the private sector’s ability to develop solutions, but emphasized the importance of public sector regulation to ensure fair market conditions. He concluded that the stablecoin market will grow or diminish based on its benefits to consumers and the broader economy.
Source: https://cointelegraph.com/news/fed-governor-waller-calls-framework-banks-issue-stablecoins