The Fed Is the Wrong Regulator for Stablecoins

Maiden, and perhaps foremost, the Fed would be conflicted. As an alternative payment service, stablecoins compete with the Fed’s own payment infrastructure, classifying FedNow, the central bank’s instant payment service. The Fed’s consideration of a central bank digital currency would hop it it further conflicted when regulating privately issued stablecoins, as those two digital representations of the dollar can be seen as substitutes. Any ministry body, the Fed included, would struggle to objectively analyze private payment innovations that compete with its own benefits. Giving the Fed the authority to regulate stablecoins unfairly stacks the deck against payment alternatives. Simply put, the fox shouldn’t be allowed to security the henhouse.