The crypto community, like other communities of other financial markets, is awaiting the statements of “Jerome Powell”, which are usually influential in the financial markets and on which many investor decisions are based.

Federal Reserve Chairman Jerome Powell spoke about the issue of a digital dollar during a hearing before the US House of Representatives Financial Services Committee on Wednesday, July 14.

The Federal Reserve Chairman stated that one of the main reasons the US central bank owns digital currency is that it will reduce the need for other public cryptocurrencies and digital stablecoins.

He added that a digital dollar would be a more viable alternative to digital currencies.

and what stated Powell says:

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I think that might be the case and I think this is one of the arguments made in favor of the US digital currency.

In particular, you will not need stablecoins, and you will not need cryptocurrencies if you have a US cryptocurrency.

I think this is one of the strongest arguments for a digital dollar.

In September 2021, the Fed will release its first official discussion paper on the digital dollar.

This will be a major step in deciding the Federal Reserve’s future action on developing its own digital currency.

Powell stressed that more regulations are needed to push stablecoins to play a greater role in the financial system.

Appropriate regulatory framework for stablecoins:

The Fed Chair agreed with recent comments from Fed Governor Lyle Brainard.

In May 2021, Brainard said that businesses and households could be affected by a fragmented payment system containing too many stablecoins.

It will therefore be necessary to have a proper regulatory framework in place to control the stablecoins.

Powell commented on this in Wednesday’s session, saying:

We have a very strong regulatory framework around bank deposits, for example, or money market funds.

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This does not currently exist for stablecoins, and if they are going to become an important part of the payments world, which we don’t think cryptocurrencies will be in but maybe stablecoins, then we need a proper regulatory framework.

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Powell already told that if the Fed were to come forward with a CBDC, he would almost certainly consult with the public and Congress.

The US dollar still dominates its position as the world’s reserve currency, but central bank cryptocurrency developments such as those in China and other parts of the world may bring some threats to the US dollar stronghold going forward.

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