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Fed Discusses Instant Payments and Stablecoin

The Federal Reserve seeks to work closely with private-sector instant payment services and plans to carve out a regulatory role to govern developments in stablecoins, a top official at the Fed said recently.

The remarks come in the wake of the Fed’s launch in July of its FedNow real-time payments network. “I view the FedNow service as complementary to the private-sector instant payments services offered today, and as banks build on these rails, customers can get better service,” said Michael S. Barr, vice chair for supervision at the Fed. His remarks came at a meeting held at the Federal Reserve Bank of Philadelphia.

On another pressing topic, Barr indicated the Fed is working to better understand the role of a potential Fed-backed digital dollar, also known as a central bank digital currency. “We continue to speak to a broad range of stakeholders and conduct basic research in emerging technologies that might support a CBDC payments backbone, or for other purposes in the existing payments system,” he said.

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