Randal Quarles, a member of the Federal Reserve Board of Governors of the United States since 2017, made an interesting statement regarding stablecoins and other cryptos.
The vice-chair for supervision stated at a bankers conference in Utah held on Monday that ‘we should be saying yes’ to stablecoins. His words don’t resemble recent comments from colleagues such as Federal Reserve Governor Lael Brainard. In an interview last month, he warned consumers and businesses that these digital assets could pose a risk in their finances.
“A global U.S. dollar stablecoin network could encourage use of the dollar by making cross-border payments faster and cheaper, and it potentially could be deployed much faster and with fewer downsides than a CBDC. And the concern that stablecoins represent the unprecedented creation of private money and thus challenge our monetary sovereignty is puzzling, given that our existing system involves—indeed depends on—private firms creating money every day.”Randal Quarles
He also talked about Bitcoin, which is not tied to the value of an asset like stablecoins are. Randal Quarles believes that the mechanisms used to create currencies such as bitcoin make these types of coins very volatile. Since BTC is “risky and speculative”, it is very unlikely for it to affect the value or the future of the US dollar.
“Bitcoin’s principal additional attractions are its novelty and its anonymity. The anonymity will make it appropriately the target for increasingly comprehensive scrutiny from law enforcement, and the novelty is a rapidly wasting asset. Gold will always glitter, but novelty, by definition, fades. Bitcoin and its ilk will, accordingly, almost certainly remain a risky and speculative investment rather than a revolutionary means of payment, and they are therefore highly unlikely to affect the role of the U.S. dollar or require a response with a CBDC.”Randal Quarles
Do you know what stablecoins are? Read more here!