The U.S. Federal Reserve published its latest Financial Stability Report and its assessment of stablecoins is surprisingly positive.

Stablecoins as a class include dollar-pegged cryptocurrencies like Tether, which are backed by traditional assets. Though the Reserve doesn’t drop names, it is mainly concerned with stablecoins that have global relevance

The report is surprisingly optimistic: it suggests that stablecoins could provide a “new medium of exchange,” a complement to existing payment systems, and a solution to crypto price volatility. But although the Federal Reserve admits that stablecoins have potential, it warns that stablecoins could have unintended consequences.

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