Expansion of Stablecoin Trading Expected... "Regulation Needed"
Bitcoin Up 1%
[Asia Economy New York=Correspondent Baek Jong-min] Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), announced that the report on the digital dollar (CBDC) will be released in early September, two months later than the initially announced July, and predicted that the need for cryptocurrencies will decrease with the introduction of the digital dollar.
On the 14th (local time), Jerome Powell appeared before the House of Representatives and predicted that the need for payment settlements through cryptocurrencies will decrease with the introduction of the digital dollar. He also emphasized the need for regulation of stablecoins. He expressed the view that discussions among Fed board members are important for the introduction of the digital dollar.
Powell explained that the Fed-level report on the digital dollar, to be released in September, will include the Fed board members' review of digital payments, calling "this process a key step toward progress in issuing a Fed-level digital dollar."
He emphasized that even if other countries such as China develop digital currencies (CBDCs), the dollar's status as the world's primary reserve currency will not be threatened.
Powell further stated, "Once the digital dollar is introduced, stablecoins or cryptocurrencies will no longer be necessary." Stablecoins are cryptocurrencies pegged to the value of the dollar. Recently, payment settlements through stablecoins have significantly increased in the U.S., causing controversy.
Powell expressed skepticism about cryptocurrencies becoming a major payment method in the U.S. but predicted that stablecoins will remain a subject of ongoing interest. However, he said that more regulation is needed for stablecoins to play a role in the financial system.
He argued, "Stablecoins should be treated like bank deposits or money market funds (MMFs) and be subject to stronger regulation."
A major foreign news outlet noted that Powell's remarks align with earlier statements by Fed Governor Lael Brainard, who warned that the expansion of stablecoin transactions could harm households and businesses, and predicted that there will be intense debates among Fed board members regarding the introduction of the digital dollar.
According to CoinMarketCap on the same day, Bitcoin is trading at $32,793, up 1.1% compared to 24 hours earlier. Ethereum, ranked second in market capitalization, rose 2.3% to $1,986, while Dogecoin fell 1.83% to 19.68 cents.
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