| Fed Chair Jerome Powell's recent congressional appearance has significant implications for stablecoins, the digital dollar, central bank digital currencies (CBDCs), and bitcoin.
Powell's statement that it would be a mistake to leave the Fed with a weak role of stablecoins highlights the importance of stablecoins in the U.S. dollar system. The upcoming launch of FedNow, an inter-bank communication platform, provides the Fed with greater control over overnight banking rates and facilitates the reshoring of dollar-denominated activity.
Powell expressed support for stablecoins, considering them a form of money, but emphasized that a central bank digital currency for individuals would be intermediated by banks. The mention of Basel III capital requirements signals a potential net-demand for dollars in the banking system, even as institutions integrate digital assets like bitcoin.
Additionally, BlackRock's filing for a bitcoin exchange-traded fund (ETF) indicates increased institutional adoption. The convergence of regulatory actions by influential bodies like the Fed and the SEC suggests a shifting landscape for stablecoins, the digital dollar and bitcoin. | 