First, and perhaps most importantly, the Fed will be at odds. As an alternative payment service, stablecoins compete with the Fed's own payments infrastructure, including FedNow, the central bank's instant payments service. The Fed's consideration of central bank digital currencies will create further inconsistencies when regulating privately issued stablecoins, as the two digital representations of the dollar are considered substitutes. . Government agencies, including the Fed, will have a hard time objectively analyzing private payments innovations that compete with their own services. Giving the Fed the power to regulate stablecoins would put them at an unfair disadvantage against alternative payment methods. Simply put, you shouldn't let foxes guard the chicken coop.
