Fed's Jerome Powell says 'stablecoins are a type of private money'

Per American Banker

It's long been debated as to whether stablecoins should be considered money under the government, and now, the Federal Reserve's Jerome Powell finally clarified what they thought about stablecoins. Fed Chair Powell said that they were a type of private money.

Powell: "The central bank is and will always be the main source of trust behind money. Stablecoins essentially borrow that trust from the underlying issuer, and in many cases, these are dollar stablecoins, so they're really borrowing that trust"

This came as the Chair was discussing regulating digital assets at a panel hosted by the Banque de France. Powell explained the relation of stablecoins to fiat currencies, especially the dollar.

Powell: "These are private forms of money. They will be subjected to runs if their reserves are not full of very high-quality assets, so there's a regulatory job to be done there."

It's imoprtant to note that there was a stablecoin that crashed in 2022, the TerraUSD, which should've been pegged to the dollar but was backed by another cryptocurency, LUNA,  to maintain the same value as the fiat currency instead.

In December, Coinbase also urged against using USDT and asked users to shift to USDC by waiving conversion fees.

See flow at unusualwhales.com/flow.

Other News:

Resources:

American Banker

Unusual Whales does not confirm the information's truthfulness or accuracy of the associated references, data, and cannot verify any of the information. Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Options, investing, trading is risky, and losses are more expected than profits. Please do own research before investing. Please only subscribe after reading our full terms and understanding options and the market, and the inherent risks of trading. It is highly recommended not to trade on this, or any, information from Unusual Whales. Markets are risky, and you will likely lose some or all of your capital. Please check our terms for full details.
Any content on this site or related pages are not intended to provide legal, tax, investment or insurance advice. Unusual Whales Inc. is not registered as a securities broker-dealer or an investment adviser with the U.S. Securities and Exchange Commission, the Financial Industry Regulatory Authority (“FINRA”) or any state securities regulatory authority. Nothing on Unusual Whales should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security by Unusual Whales or any third party. Certain investment planning tools available on Unusual Whales may provide general investment education based on your input. You are solely responsible for determining whether any investment, investment strategy, security or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your legal or tax professional regarding your specific situation. See terms for more information.