According to the acting FDIC chair, “payment stablecoins” might result in the “deregulation of traditional banks”

In a recent lecture, Martin J. Gruenberg, the Acting Chairman of the Federal Deposit Insurance Corporation (FDIC) Board of Directors since February 5, 2022, discussed “the prudential regulation of crypto–assets.”

Wikipedia explains the FDIC as follows: The Federal Deposit Insurance Corporation (FDIC) is one of two organizations that provide deposit insurance to depositors in U.S. depository institutions; the other is the National Credit Union Administration, which supervises and insures credit unions.

The FDIC is a federal company that provides deposit protection to depositors in commercial and savings banks in the United States. The FDIC was established by the Banking Act of 1933, which was passed to restore confidence in the American banking sector during the Great Depression.

Gruenberg made his remarks regarding “payment stablecoins” on 20 October 2022 at a lecture at the Brookings Institution entitled “The Prudential Regulation of Crypto-Assets”.

“The distributed ledger technology on which cryptocurrencies and stablecoins are based “may show to have substantial uses and public value inside the payments system, even if they have not yet proved to be a meaningful or dependable source of payments in the actual economy”.

“There has been substantial discussion and public debate over the advantages and risk involved with the establishment of a payment stablecoin subject to prudential regulation for domestic and international cross-border payment purposes.”

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