[LarryEt]

What would the point of a FED created USD stablecoin be over USD?

People act like you have to take gold bars to the grocery store to make exchanges as opposed to just using your bank card and electronically settling up in USD.

[mightybyte]

The point would be to provide a more legitimate USD stablecoin in a space that seems to be attracting a growing user base (blockchains). I imagine a significant share of the market would choose the Fed-provided stablecoin over any of the non-Fed competitors. If you're using US Dollars in the first place you're already inherently trusting the Fed, so it shouldn't be a much bigger leap to also use their blockchain-based version. This would reduce the degree to which Tether and others are "a challenge to financial stability" because it puts mint/burn powers of the dominant USD stablecoin squarely back in the control of the Fed.