The Federal Reserve's CDIAC has raised concerns about the risks posed by stablecoins to traditional banking systems. They warn that these digital assets could lead to significant deposit outflows, diminishing community banks' ability to lend effectively.
The committee advocates for a unified regulatory framework to prevent regulatory arbitrage and ensure stablecoins are adequately regulated. This is vital for maintaining lending capabilities for small and medium-sized enterprises that rely on local banks.
Integrating stablecoins into the regulatory structure is seen as essential for market stability and minimizing disruptions to traditional banking practices.
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