Stablecoins can benefit the financial system!

A concurring opinion about stablecoins was offered by the Federal Reserve Bank governor who told an audience at the Christopher Waller Institute of Advanced Studies that well-regulated stablecoins could benefit the current financial system.

Stablecoins play a very important role in our money because we know that the amount of money can be less and more than other coins that are unstable but in this case stablecoins play a very important role in keeping our money stable. These currencies can also reduce the need for payment intermediaries and thereby reduce the cost of global payments. But the stablecoin immediately qualified its comments by saying "security is not guaranteed."

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Since such coins are somewhat risky, appropriate guardrails can be created to de-risk them and reduce other risks such as their possible use in illegal financing. If these risks can be removed from such coins then stablecoins will come home as a safe asset in payments and various new trading platforms as well as benefits served by such coins. But at the same time he gave many more arguments about the future of these coins. He argues that decentralized finance can achieve a symbiotic relationship with traditional finance rather than completely replacing it.

This is not new though as such a view has been raised by some US lawmakers before. The argument put forward by some US lawmakers is that decentralized money and dollar-pegged stablecoins could dominate the dollar for decades.

They presented an argument where they made a case for how stablecoins could mitigate the debt crisis. Stablecoins create demand for US Treasuries and the US dollar, which will keep the dollar competitive against the Chinese yuan and preserve its current status as the global reserve currency. Stablecoins have launched the Transparency Stablecoin Law Building for Payments on Bills.