At a recent event, a member of the Board of Governors of the US Federal Reserve spoke extensively on stablecoin regulations and their benefits.
Stablecoin benefits were the focus of the speech of a Federal Reserve Governor recently. Governor Christopher Waller, speaking at the Institute of Advanced Studies, expressed his opinions on stablecoin regulations. His speech was on the topic of ‘centralized and decentralized finance’ and mainly laid stress on stablecoin benefits, especially for the US economy.
The first part of his speech dwelled on the benefits and cons of centralized finance. He provided a brief history of what led to centralized financial operations in the world in the first place. Moving on to decentralized finance, Waller defined terms such as crypto assets, tokenization, and blockchain technology. After touching upon digital ledger technology, smart contracts, and tokenization, he moved to stablecoins.
The Federal Reserve Governor mentioned how stablecoins could reduce payment costs and remove the need for intermediaries.
Further, he said, “If appropriate guardrails can be erected to minimize run risk and mitigate other risks, such as their potential use in illicit finance, then stablecoins may have benefits in payments and by serving as a safe asset on a variety of new trading platforms.”
Source | Christopher Waller
Thereafter, he explained the need for regulations in the space and how it could be advantageous. He moved on to compare both centralized and decentralized finance and how the latter could complement the former. The Governor made clear his opinion that decentralized finance could not replace traditional finance completely. However, he was of the belief that it could complement it. At the same time, he stated how innovations in decentralized finance could drive efficiency.
Moreover, in the last few years, the relevance of stablecoins has become an important subject in traditional finance. These products offer a slew of benefits in terms of financial services.
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