This is the Cato Daily Podcast for Wednesday, October 27th, 2021.

I'm Caleb Brown.

Why are Central Bankers and Federal Regulators so concerned about stable coins, the

cryptocurencies that track the value of government money.

Cato's Norbert Michelle is author of a new paper on stable coins,

specifically the Treasury Department's misguided effort to stymie the new financial innovation

under the guise of systemic risk.

We spoke this week.

It is understandable that a Central Bank and executive branch regulators would be at least a little bit

concerned about the advent of cryptocurrency it's hard to track it's hard to track. It's hard to measure the movements in there.

So if you're a central banker, there could be all sorts of economic activity that's going on

that you're not effectively able to track but stable coins these are coins pegged

to a currency in the case we're talking about dollars.

Why are Central Banks and Federal Regulators

so concerned about the advent of stable coins?

Not that I think they will admit this in a very explicit way, but I believe they are concerned out of this almost nebulous fear that the dollar will lose its status.

If you think about sort of how all this really got started with stable coins. It was when Facebook announced their

Libra project because prior to Facebook announcing their Libra project this sort of

this stuff was all just sort of in the background.

But as soon as Facebook announced they were going to do something

with a stable coin, the federal government took notice

and said, oh my gosh, you have all these people

...