Federal Reserve Report on Central Bank Digital Currency
The Federal Reserve issued a much awaited report on a potential central bank digital currency. It ended up a big nothing burger. I have some concerns about this idea would crowd out innovation in stablecoins. Jake Chervinsky wrote a great piece raising concerns about a CBDC.
Rep. Tom Emmer summed it up:
Just looking at how the Federal Reserve designed the primary dealer system for open market purchases, they chose an elite club of Wall Street institutions, and thereby showed a preference for working with a select group of intermediaries they could control rather than opening up competition. I fear they would take a similar approach in choosing which financial intermediaries would interact with its CBDC.
The money quote: “The Federal Reserve does not intend to proceed with issuance of a CBDC without clear support from the executive branch and from Congress, ideally in the form of a specific authorizing law.” Which means it definitely won’t happen in the next few years, which is for the best.
Let stablecoins do their thing. We already have the Fed involved in running a payment system that could have always been better run by the private sector. If their economists need more to do, start a few more academic workshops series and write more papers.
What’s ahead for Stablecoins
Which reminds us about the President’s Working Group Report on Stablecoins last year. The executive branch asked for legislative power, which they won’t get. They also threatened to designate stablecoins as systemically significant activities. Good luck with that FSOC. When FSOC designated Metlife as systemically significant, Metlife sued and won big time.
Hopefully the administration will be hamstrung by lack of authority this year, leave stablecoins alone, and let self-regulatory alternatives like Centre conduct standard setting around treasury audits, etc.
I see, OCC
The Office of Comptroller of the Currency took a very anti-currency stance recently. While it approved SoFi’s purchase of a bank, as a condition of approval is forbid the bank from touching cryptocurrency.
Genesis Block! Write to the SEC in Support of My Petition
I’m always making trouble. I caused a ruckus at the SEC this week when I filed a public petition for rulemaking at the SEC. I demand the SEC open a call for comment on the unique needs of digital asset regulation. Chair Gensler’s “just come in and talk to us” isn’t working. This would provide the digital asset community a way to catalogue all the changes needed in the securities laws to adapt to the new world of digital asset regulation, and could function as a genesis block for a regulatory approach for the 21st Century. Let’s crowdsource a hack of these 88 year old laws!
WTF…ETF?
This week the SEC disappproved yet another Bitcoin spot ETF application made by Anthony Scaramucci. But we know you can’t stop the Mooch. Davis Polk has put together a great playbook for how to challenge the SEC on this. Get em Mooch!