Private cryptocurrencies and a US central bank coin would be able to coexist, Fed chief Jerome Powell says

Jerome Powell
Federal Reserve Chairman Jerome Powell. Andrew Harnik/AP Photo

Private cryptocurrencies  — including stablecoins — and a central bank digital currency would be able to coexist, Federal Reserve Chair Jerome Powell said Tuesday.

He was responding to a question posed by Sen. Pat Toomey during a confirmation hearing for a second term as head of the central bank. 

“If Congress were to authorize and the Fed were to pursue a central bank digital dollar, is there anything about that that ought to preclude a well regulated, privately issued stable coin from co-existing with a central bank digital dollar?” Toomey asked.

“No, not at all,” Powell quickly responded.

The comments appeared to be a shift in tone from July, when Powell said he saw no need for cryptos if the central bank were to issue its own CBDC.

Such cryptos include stablecoins, a type of crypto pegged to an asset such as a fiat currency or a precious metal. Among well-known stablecoins are those issued by Tether, Circle, and Binance.

The lack of clarity on how to regulate this rapidly burgeoning trillion-dollar space has caused those in the US Capitol, Wall Street, and the crypto universe to clash.

But answers may be ahead. Powell on Tuesday also confirmed that the central bank is planning to publish its much-awaited report on digital currencies in the coming weeks.