BWC member, Linda Jeng breaks down the potential for stablecoins to change the status quo of the Federal Reserve. She proposes having stablecoins back Federal Reserve payments to create a “narrower” banking system which seeks to facilitate liquidity over credit. The Fed’s adoption of stablecoins could reduce systemic risk by filling in the gap between the private and public sector.

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All views expressed by members are their own and not reflective of the views of the Bretton Woods Committee.