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Acting United States Federal Deposit Insurance Corporation chairman Martin Gruenberg spoke<\/a>\u00a0on Oct. 20 about possible applications of stablecoins and the FDIC\u2019s approach to banks considering engaging in crypto-asset-related activities. Although he saw no evidence of their value, Gruenberg conceded that payment stablecoins merit further consideration.<\/p>\n Gruenberg began his talk at the Brookings Institute with an expression of frustration seemingly common among many regulators:<\/p>\n \u201cAs soon as the risks of some crypto-assets come into sharper focus, either the underlying technology shifts or the use case or business model of the crypto-asset changes. New crypto-assets are regularly coming on the market with differentiated risk profiles such that superficially similar crypto-assets may pose significantly different risks.\u201d <\/p><\/blockquote>\n In light of those difficulties, the FDIC has said it is striving to gather crucial information to aid it in comprehending and eventually providing supervisory feedback on crypto assets through letters th banks are required to use to inform<\/a> the agency of their crypto-related activities. Customers and insured institutions need a better understanding<\/a> of how the FDIC works as well, Gruenberg noted. <\/p>\n Related: Crypto adoption: How FDIC insurance could bring Bitcoin to the masses<\/a><\/em><\/strong><\/p>\n Moving on to stablecoins, Gruenberg said that although \u201cthere has been no demonstration so far of their value in terms of the broader payments system\u201d outside of the crypto ecosystem, payment stablecoins \u2014 those \u201cdesigned specifically as an instrument to satisfy the consumer and business need\u201d for real-time payments \u2014 may merit consideration. This is in spite of the fact that their benefits largely overlap those of the non-blockchain<\/a> FedNow system that is expected to premiere next year. <\/p>\n Gruenberg sounds skeptical that the benefits of payment stablecoins would outweight the rollout of FedNow, a real-time payment system we’re expecting the government to release in the spring. But notably, he says “there may be merit” to continued study here. pic.twitter.com\/0G7GP8MoNz<\/a><\/p>\n \u2014 Brendan Pedersen (@BrendanPedersen) October 20, 2022<\/a><\/p><\/blockquote>\n A payment stablecoin could \u201cfundamentally alter the landscape of banking,\u201d Gruenberg said. Most of the potential changes he saw were negative, even if there should be prudential regulation, 1:1 backing and permissioned ledger systems. Consolidation and disintermediation within the banking system (especially community banks) and credit disintermediation that could \u201cpotentially create a foundation for a new type of shadow banking\u201d were among the risks Gruenberg identified.<\/p>\n Back in August, the FDIC was accused by a whistleblower of deterring banks from doing business<\/a> with crypto-related companies. <\/p>\n<\/div>\n\n