Here is our pick of the 3 most important Stablecoin news stories during the week.
Here comes the Fed!
Well not really, but this week we got a lot more insight into what the Fed’s is thinking with the release of a discussion paper that examines the pros and cons of a potential U.S. CBDC.
This analysis of the announcement from the Cato Institute is spot on.
“For a 40‐page document, the findings were actually rather thin. It seems the Fed is still undecided, but it is leaning towards launching a CBDC that would protect privacy without permitting anonymous use, be intermediated (or hosted) by private banks, and be easily transferable. In other words, it would be much like what already exists.”
Separately, Jerome Powell, the recently re-confirmed chair of the Federal Reserve, has reaffirmed his belief that a digital dollar should not drive private stablecoins out of the market.
But the week began with a rallying cry from the Central Bankers, Central Bank, the Bank of International Settlements or BIS, declaring that only Central Bankers can make and manage real money.
According to the general manager of the Bank for International Settlements, Agustín Carstens, sound money should not be based on trustless, permissionless, and anonymous ledgers, but on trust, and more specifically—trust in central banks.
“My main message today is simple: the soul of money belongs neither to a big tech nor to an anonymous ledger. The soul of money is trust. And central banks have been and continue to be the institutions best placed to provide trust in the digital age.”
So in summary, this week the two major money regulators, the Fed and BIS, both gave us some more insight into their thinking. The Fed has left the door open to privately issued stablecoins and if they build a CBDC it would operate much like cash does today, while the BIS has claimed that only Central Bankers can provide the “soul of money”.
We will see. But in this game talk is cheap, if consumers like an innovative new product, they will grab it and there are plenty of choices now out there and soon coming.
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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