Stablecoins, National Currencies, CBDCs, and Banks

The Federal Reserve is set to release a much anticipated discussion paper on the prospect of a digital U.S. dollar. According to the Bank for International Settlements (BIS), over 86 percent of central banks are investigating the possibility of a digital currency.[1] Although China began a trial for its digital yuan in four cities in 2020, the Commonwealth of the Bahamas was the first to formally issue a sovereign digital currency, known as the Sand Dollar. In our article, Sovereign Digital Currencies: Parachute Pants or the Continuing Evolution of Money, we explore the budding dynamic between cryptocurrencies, particularly … Read more

Evaluating Dodd-Frank and International Approaches to Clearinghouses, Central Banks, and Swap Lines

On June 26, in a House Committee on Financial Services hearing, “Examining How the Dodd-Frank Act Could Result in More Taxpayer-Funded Bailouts,” former FDIC Chair Shelia Bair testified to being “surprised at the lack of concern over the designation of “financial market utilities,” and particularly Section 806 which permits the Federal Reserve to provide safety net access to designated financial market utilities.”

Indeed, these reforms in Dodd-Frank’s Title VIII have received little attention.  Related provisions in Dodd-Frank’s Title XI mandating disclosure of the use of the Federal Reserve’s currency swap line authority with nongovernmental third parties have similarly been largely … Read more

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