When Sen Mike Crapo, a ranking member of the Senate Finance Committee, questioned Federal Reserve Chairman Jerome Powell Tuesday, one thing was on his mind.
Like many interested in the crypto space, Crapo has asked for months about the stablecoin report. Delayed for a half year now due to sudden inflation and unemployment issues, Powell said the stablecoin report is still weeks out.
“I hate to say it again; it is ready; within the next few weeks, we will be publishing it,” Powell said. “It’s more of an exercise in asking questions from the public as opposed to taking stances. Though we will be taking stances as well.”
Since the summer, the so-called stablecoin report has been ‘ready for release.’ But, unfortunately, not much is known of its contents, aside from peculiar rumors that echo against constant regulatory worries for the crypto industry.
Here is what we know
The report will be written with the Boston Fed, the NY Fed, and other federal reserve branches. It is expected the report will address stablecoins in private and public companies, like USDC from Circle and Central Bank Digital Currencies, or coins used for settlement within banking.
As the year drew to a close, a treasury report from the President’s Working Group asked lawmakers for more controls over stablecoins. The lawmakers’ response was sluggish.
Senate Banking Committee Chair members Senator Sharrod Brown (D) wrote to stablecoin providers for insight while advocating for consumer protections. On the other side of the aisle, Senator Pat Toomey (R) defended innovation in the crypto space.
The Fed may even release their research on a US stablecoin for Fed settlement, dubbed Project Hamilton. In the rumored project, the Fed is working directly with the cryptocurrency center at MIT to research a Federal coin.
According to the SVP of the Boston Federal Reserve, Jim Cunha, other industry leaders in the payments and credit space are contributing ideas.
Why it makes cents to talk stablecoins
Stablecoins and CBDCs are at the forefront of tech and economic innovation. Everyone wants in: from governments worldwide like the UK’s Britcoin plans, to Meta and Block competing with their own lofty goals for currency.
Back when regulators and legislators finally started taking notice, New York Community Bank said it was already minting its own stablecoins to use for settlement. And just last week, a rumored PayPal hackathon produced a quick draft of a Paypal Stablecoin.
Even just a rumor and a leaked jpeg of a PaypalCoin logo would be enough to shake the entire financial world, as some think PayPal may be the best-equipped institution to implement its own coin.
In light of this, Toomey asked Powell about CBDCs, and if a US-backed one would compete with private industry options.
“If Congress were to authorize the Fed to pursue a central bank digital dollar, is there anything about that that ought to preclude well-regulated, privately issued stablecoins from coexisting with a central bank digital dollar?” Toomey asked.
Powell, who reiterated that the Feds plan and report would come in the next few weeks, said, “No, not at all.”