- A US digital dollar could someday operate alongside
stablecoins , Fed Vice Chair Lael Brainard said Thursday. - Her Capitol Hill testimony followed an eruption in the cryptocurrency market surrounding the collapse of algorithmic stablecoin terraUSD.
A digitized
"In some future circumstances,
There's been "explosive growth" in an emergent digital financial system, and if private monies, in the form of either stablecoins or
Stablecoins have been a hot topic in the financial
News came Thursday that Terra supporters voted to approve founder Do Kwon's plan for a new blockchain for its luna cryptocurrency, without reviving the failed terraUSD.
"The recent turmoil in crypto financial markets makes clear that the actions we take now—whether on the regulatory framework or a digital dollar—should be robust to the future evolution of the financial system," said Brainard.
The Federal Reserve in January published a report laying out the potential benefits and risks of fully digitizing the US dollar but hasn't sided for or against a CBDC.
The US dollar is the most widely used currency in international payments and investments, and Brainard said US officials should consider how the potential absence or presence of a US CBDC could affect the usage of the dollar in global payments.
"A US CBDC may be one potential way to ensure that people around the world who use the dollar can continue to rely on the strength and safety of the US currency to transact and conduct business in the digital financial system," she said.