Federal Reserve Chair, Jerome Powell, suggests that a Central Bank Digital Currency could co-exist with stablecoins, a deviation from his previous views.
The Fed Chair has no intention of abolishing cryptocurrencies, a different approach from that of the Chinese administration.
While testifying to Congress, Powell said that his institution would make rising interest rates a priority to tackle the current high inflation rate.
Powell had pointed out in July that a CBDC would work to replace cryptocurrencies, of which stablecoins are no exemption.
He commented earlier that it was better for Fed to take its time in the rollout of USDC for it to get it right the first time.
The emergence of stablecoins has attracted clashing views among regulators and policymakers. The US House Financial Services Committee Chair, Maxine Waters, termed it a threat to the USD.
The rest of the industry sees stablecoins as complementary to the financial services, but other quotas maintain that they could be categorized as securities.