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First, and maybe foremost, the Fed can be conflicted. Instead fee service, stablecoins compete with the Fed’s personal fee infrastructure, together with FedNow, the central financial institution’s instantaneous fee 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 may be seen as substitutes. Any authorities physique, the Fed included, would wrestle to objectively analyze personal fee improvements that compete with its personal providers. Giving the Fed the authority to manage stablecoins unfairly stacks the deck towards fee options. Merely put, the fox shouldn’t be allowed to protect the henhouse.
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