that people who avoid bank accounts because of concerns about privacy or trust in the banking system, rather than the cost of such accounts, will greatly prefer having accounts with the federal reserve. return to text 10 the federal reserve also needs to consider whether private - sector stablecoins could disintermediate deposits out of the banking system, but in general, the risk of disintermediation should be lower for stablecoins compared to a cbdc. importantly, if a stablecoin is backed by short - term securities, the stablecoin provider must take the funds received in return for the issuance of stablecoins and purchase short - term securities for the stablecoin “ anchor ” pool. the seller of those securities will then take the funds received and put them back into the banking system. return to text 11 private - sector stablecoins are also subject to cyber risk, of course, but any individual private stablecoin network would be less systemic than a cbdc for an entire advanced economy, and private companies are frequently better able to make the rapid and constant investment in technology required to keep current with technological security threats. return to text 12 see, e. g., 31 u. s. c. § 5318 ( h ). return to text 6 / 6 bis central bankers'speeches

a global u. s. dollar stablecoin network could encourage use of the dollar by making cross - border payments faster and cheaper, and it potentially could be deployed much faster and with fewer downsides than a cbdc. and the concern that stablecoins represent the unprecedented creation of private money and thus challenge our monetary sovereignty is puzzling, given that our existing system involves — indeed depends on — private firms creating money every day. we do have a legitimate and strong regulatory interest in how stablecoins are constructed and managed, particularly with respect to financial stability concerns : the pool of assets that acts as the anchor for a stablecoin ’ s value could — if use of the stablecoin became widespread enough — create stability risk if it is invested in multiple currency denominations ; if it is a fractional rather than full reserve ; if the stablecoin holder does not have a clear claim on the underlying asset ; or if the pool is invested in instruments other than the most liquid possible, principally central bank reserves and short - term sovereign bonds. all of these factors create “ run risk ” — the possibility that some triggering event could cause a large number of stablecoin holders to exchange their coins all at once for other assets and that the stablecoin system would not be able to meet such demands while maintaining a reasonably stable value. but these concerns are eminently addressable — indeed, some stablecoins have already been structured to address them. when our concerns have been addressed, we should be saying yes to these products, rather than straining to find ways to say no. indeed, the combination of imminent improvements in the existing payments system such as various instant payments initiatives combined with the crossborder efficiency of properly structured stablecoins could well make superfluous any effort to develop a cbdc. in contrast to stablecoins, cryptoassets like bitcoin are not tied to the value of an asset like a sovereign currency. rather, they seek to create value in the coin through other means, usually some intrinsic mechanism to ensure scarcity, like bitcoin ’ s mining process, or some characteristic of the coin that cannot be matched by the traditional payment system, such as inviolable anonymity. some commentators assert that the united states must develop a cbdc to counter the appeal of cryptocurrencies. this seems mistaken. the mechanisms used to create such cryptoassets ’ value also ensure that this value will be highly volatile — rather similar