First, and maybe foremost, the Fed can be conflicted. As a substitute fee service, stablecoins compete with the Fed’s personal fee infrastructure, together with FedNow, the central financial institution’s immediate 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 non-public fee improvements that compete with its personal companies. Giving the Fed the authority to control stablecoins unfairly stacks the deck in opposition to fee alternate options. Merely put, the fox shouldn’t be allowed to protect the henhouse.
