This podcast episode delves into the world of stablecoins and the ongoing debates surrounding their regulation. The speakers discuss the potential risks and benefits of stablecoins in enhancing payments and serving as a competitive instrument. They also explore the challenges faced by projects like Facebook's Libra in obtaining regulatory approval and the importance of stablecoins as a solution to the high costs and friction associated with the current payment system. The episode highlights the parallels between stablecoins and eurodollars and their potential impact on the financial system. It also discusses the US's ability to economically sanction through systems like SWIFT and the ongoing developments in central bank digital currencies. The section concludes by emphasizing the need for a regulatory framework to address the risks and benefits associated with stablecoins and the importance of finding a balance between innovation and traditional financial regulations.
