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Central Bank Digital Currencies and Regulatory Alternatives: the Case for Stablecoins

Abstract: Central bank digital currencies (CBDCs) have been in the spotlight as the Federal Reserve and other central banks explore introducing them. At the same time, stablecoins are also growing in popularity, and many people including politicians and regulators have started discussing how to properly regulate their issuance and use. In this article, I discuss the question of whether a regulatory framework for stablecoins — where regulated banks can issue stablecoins backed 100 percent by deposits at the central bank — could serve as an alternative to issuing CBDCs.

Keywords: stablecoins; Central Bank Digital Currencies; regulation; federal reserve;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2022-07

Volume: 22

Issue: 26