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Powell said nothing would prevent a well-regulated stablecoin from existing alongside a U.S. CBDC.
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He also revealed that a long-awaited report on cryptocurrencies is ready to be released within weeks.
Cryptocurrencies and a U.S. central bank digital currency (CBDC) can coexist, according to remarks by Federal Reserve Chair Jerome Powell.
The Fed chief made the comment while answering a direct question from Senator Pat Toomey during Powell’s renomination hearing on Capitol Hill.
The lawmaker asked whether anything would prevent a digital dollar issued by the Fed from coexisting with private stablecoins.
According to Business Insider, Powell replied, “no, not at all.”
His response suggests that if Congress approves a CBDC and the Fed is able to launch one, nothing would “preclude a well-regulated, privately issued stablecoin from existing alongside” the digital dollar within the same financial system.
One example of such a stablecoin is USD Coin (USDC), a dollar-pegged token issued by Circle and Coinbase.
Crypto report ready
Powell also said the long-delayed report on digital currencies should be published soon, within weeks.
He told Senator Mike Crapo that the cryptocurrency report is finished and that the delay in releasing it was largely due to monetary policy considerations.
Powell noted that producing the report was a difficult task and that the agency “hadn’t quite gotten it to the place it needed to be.” He said the report is now ready for release.
“The report is really ready to be released, and I expect we will release it — I hate to say it again — in the coming weeks, but it’s really in a place where it is ready to be released,” the Fed chair reiterated.
According to Powell, the report’s engagement structure will primarily involve “asking questions and soliciting feedback from the public,” rather than advancing predetermined positions on issues.
That said, he added that the Fed would not refrain from taking positions where appropriate.
Powell said in December that he did not view cryptocurrencies as posing a threat to the stability of the U.S. financial system. He has also told Congress that the Fed is not seeking to follow China’s approach of banning cryptocurrencies.