New York Fed advisor Antoine Martin said stablecoins could offer central banks a way to have their own digital currencies.
Martin, a financial stability adviser at the Fed, said:
“Central banks can support stablecoins by allowing them to be backed one by one with assets in the central bank account, rather than issuing a CBDC.
Regulating the legal environment to support stablecoins is already a challenge, but probably easier than managing a CBDC for retail use.”
New York Fed Advisor Cited Private Companies as Example
Martin made a comparison between the use of stablecoins and Chinese payment platforms Alipay and Tenpay, describing them as “very close cousins”. These services are required to hold as many yuan as users transfer money at the Chinese central bank. According to Martin, this is something stablecoins can do.
In an article he wrote in April 2021, Martin said that stablecoins are riskier than CBDCs. Additionally, the consultant noted that some stablecoins tend to avoid a centralized intermediary, unlike CBDCs.
