Private sector or Public?
Here is our pick of the 3 most important Stablecoin news stories during the week.
This week’s stories seem to have a common theme, should we just have Public sector built and managed money or should we allow the Private sector in?
Accenture Plc will fund five private-sector pilots, pooling efforts from retailers, financial firms, NGOs, and more. The goal is to build data capable of informing U.S. policymakers when or if they do eventually develop a digital dollar. The Digital Dollar Project was founded in 2020 as a collaboration between the Digital Dollar Foundation and Accenture to investigate and promote research into a central bank digital currency (CBDC).
The US Fed is taking an interest in other Private sector ecosystem of money developers. A paper published by the Federal Reserve Bank of St. Louis has delved into the expansion of decentralized finance (DeFi) and Ethereum’s role in it.
The research, penned by Fabian Schär and published on Sunday, has taken a deep dive into the world of DeFi, hinting that if security concerns and risks can be addressed, it may lead to huge changes in the financial industry.
“DeFi uses smart contracts to create protocols that replicate existing financial services in a more open, interoperable, and transparent way,” Schär wrote, also hailing its efficiency, accessibility and composability.
Finally, that so-called bastion of free enterprise (sarcastica font on), the Economist has come out with a major spread, titled GovCoin, saying that although there are dangers the Public sector should step up.
“Governments and financial firms need to prepare for a long-term shift in how money works, as momentous as the leap to metallic coins or payment cards. That means beefing up privacy laws, reforming how central banks are run and preparing retail banks for a more peripheral role.”
So who will step up? Will the current regulatory arbitrage between Digital (Crypto and Stablecoins) and the old way remain? Or will the State become a power of innovation following in China’s path and build us a new financial system that works in our best interests?
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
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