First, and maybe foremost, the Fed can be conflicted. Instead cost service, stablecoins compete with the Fed’s personal cost infrastructure, together with FedNow, the central financial institution’s instantaneous cost service. The Fed’s consideration of a central financial institution digital foreign money would depart it additional conflicted when regulating privately issued stablecoins, as these two digital representations of the greenback will be seen as substitutes. Any authorities physique, the Fed included, would wrestle to objectively analyze non-public cost improvements that compete with its personal companies. Giving the Fed the authority to control stablecoins unfairly stacks the deck towards cost alternate options. Merely put, the fox shouldn’t be allowed to protect the henhouse.
