is inappropriate for the federal reserve to regulate the industry in which it competes, others believe that by providing payment services, the federal reserve gains operational experience that makes it a better regulator. more specifically, participants had differing views on various aspects of these issues and the consequences of each scenario. many were concerned that, if the federal reserve withdrew from these services, it would result in short - term service disruptions with few long - term benefits. many indicated that prices for retail services would rise, and smaller banks and remotely located banks were concerned that they would have difficulty obtaining check and ach services. concern was expressed that without an operational presence, the federal reserve would have to regulate the retail payments system more extensively to ensure that all banks had access to the services. while not unanimous, there was strong support from institutions of all sizes for continued federal reserve provision of retail payment services. some stated that because check payments would continue to dominate the u. s. payments system for the foreseeable future, the federal reserve should maintain its check services while consumers adapt to the use of electronic payments mechanisms. others indicated that by establishing a more aggressive operational presence in the check and ach services, the federal reserve could undertake initiatives to promote efficiency in general, and to encourage the use of electronics to collect checks in particular. some indicated that private - sector service providers would prefer to invest in developing new markets and devising new technologies rather than in expanding their capacity to collect paper checks. they also indicated that they face significant resource demands to address other operational issues, such as the federal government ’ s initiative to deliver almost all payments electronically by 1999 and preparation for the year 2000. no matter what their view about the federal reserve ’ s continued presence in the retail payments market, virtually all participants believed that the federal reserve could play an important role in educating consumers about the benefits of electronic payments. while the committee has not reached detailed final conclusions, it is clear that the federal reserve can best ensure the safety and effectiveness of the nation ’ s payments system by continuing to provide its existing retail payment services for checks and ach, and we will so recommend. we agree with a recurring theme at the forums that there would likely be significant disruptions in the payments system if the federal reserve withdrew, with little net societal benefit. currently, the banking industry is trying to grapple with a variety of technological issues, an effort that is requiring a great deal of resources. banks are adopting the latest technological innovations to provide their customers with new and improved

. s. dollar. when an asset is pegged to a government - issued currency, it is a form of private money. when that asset is also used as a means of payment and a store of value, it borrows the trust of the central bank. so, the federal reserve has a strong interest in ensuring that any stablecoin offerings operate within an appropriate federal prudential oversight framework, so they do not threaten financial stability or payments system integrity. to provide clarity for banks interested in engaging with these assets, we recently issued guidance on the process by which a fed - supervised bank can seek to obtain a supervisory non - objection before issuing, holding, or transacting in " dollar tokens. " 2 as the board of governors announced in january, before those banks engage in these activities, they are advised to obtain a written supervisory non - objection from the fed verifying that they have appropriate risk management and systems in place to identify and control potential risks, such as those related to cybersecurity and compliance with anti - money - laundering laws. 3 the guidance only covers the activities of the banks over which we have supervisory authority. but there are big risks when the federal reserve does not have direct supervisory and regulatory authority. i remain deeply concerned about stablecoin issuance without strong federal oversight. as i mentioned earlier, stablecoins are a form of money, and the ultimate source of credibility in money is the central bank. if nonfederally regulated stablecoins were to become a widespread means of payment and store of value, they could pose significant risks to financial stability, monetary policy, and the u. s. payments system. it is important to get the legislative and regulatory framework right before significant risks emerge. we appreciate the work congress has been doing on this important issue and look forward to further engagement to ensure that there is a robust federal framework for all stablecoins. as everyone in this room knows, innovation never stops. we are continuing to explore new technologies so we can continue to support a robust payments system that meets 3 / 4 bis - central bankers'speeches the needs of the public. we are committed to supporting responsible innovation, both through our provision of payments rails and through timely and relevant supervisory feedback to the institutions we supervise. looking ahead, we will continue to engage in exploring new technologies, including those that could be used to further advance our provision of payments rails. as i mentioned, this work involves continuing to study the next generation of ledger technology