Fed Must Affirm Stablecoin Moneyness to Preserve Dollar Dominance
The Federal Reserve must affirm the 'moneyness' of stablecoins to keep the US dollar competitive in the 21st century, argues a professor at George Mason University.
According to Derek Horstmeyer, if the Fed does not begin to design a system where stablecoins are easily transferable to tokenized deposits and other forms of money, it risks a system with significant uncertainty over the value of a digital dollar.
The Bank of England has already taken steps to offer liquidity backstops to qualified stablecoin issuers, giving U.K. stablecoins the same treatment as other bank-created money.
The US Fed needs to follow suit and experiment with protocols to affirm the moneyness of all digital/tokenized forms of money that are compliant with the Genius Act and other standard regulations.