Categories: Market

Fed and Yale researchers offer 2 regulatory frameworks for stablecoins

Professor Gary B. Gorton of the Yale School of Management and Jeffery Zhang of the Board of Governors of the US Federal Reserve System have jointly authored a 49-page paper entitled “Taming Wildcat Stablecoins. Stablecoins”.

The Federal Reserve’s (Fed) research on central bank digital currencies (CBDCs) has continuously expanded to include stablecoins and whether they can be effectively regulated.

“Taming Wildcat Stablecoin” is publish on July 17 SSRN, Gorton and Zhang argued that “privately created currencies” like stablecoins “are not an efficient medium of exchange because they are not always accepted in equal parts.” The authors then propose solutions to tackle what they believe to be “systemic risk from stablecoins”.

After delving into the history of private money, beginning with the free banking era in the United States from 1837 to 1864, the researchers concluded that policy makers had two options: decisions regarding the stablecoin Regulation: Making stablecoins equal to public money or a CBDC, where private stablecoins that no longer exist are taxed.

For the ability to equate stablecoins with public money, the government may require that stablecoins be issued through banks insured by the Federal Deposit Insurance Corporation (FDIC) or require that all stablecoins be issued. Stablecoins must be fully secured.

The article appeared on Twitter yesterday (July 18). Avanti founder Caitlin Long made an interesting connection between release day and an upcoming stablecoin working group led by Treasury Secretary Janet Yellen.

“Here is a new report from the Fed (+ Yale) outlining regulatory options for US dollar stablecoins. Interestingly, it was published yesterday (Saturday) and its first caption relates to President Janet Yellen’s large working group meeting on the subject tomorrow. “

Starting today (July 19), Yellen will convene a working group for financial markets to discuss stablecoins. The group brings together various regulators to assess the potential benefits and risks of stablecoins.

Discussions about stablecoins have increased lately, with Fed chairman Jerome Powell calling for stricter regulations on assets like tether (USDT). During a hearing in front of the House of Representatives on July 14, Powell said that due to their extreme price volatility, cryptocurrencies are not going to get into the payment system anytime soon.

So far, Fed researchers have been more open to the idea of ​​a CBDC, even though the US, unlike its counterparts in Asia and Europe, has no immediate plans for a dollar.

Despite its hostility to Bitcoin, China has become a leader in the issuance of a centrally controlled digital currency.

Teacher

According to Cointelegraph

Follow the Youtube Channel | Subscribe to telegram channel | Follow the Facebook page trang

CoinX

Recent Posts

Bitcoin Trader Turned $100M in His 20s—Now Reveals 5 Altcoins to Build a $50M Portfolio, With Memecoins Leading the Way!

As Bitcoin reaches unprecedented heights and the market surges, he's highlighting five altcoins poised for…

1 hour ago

Which Crypto Will Explode in the 2024-2025 Bull Run?

With the crypto market reaching new peaks, many are eager to discover digital currencies poised…

1 hour ago

Dogecoin and Shiba Inu Approach $1, but All Eyes Are on XYZVerse’s Push to $10!

XYZVerse, blending sports passion with meme energy, is set to make a significant impact, uniting…

2 hours ago

Will Bitcoin Crash or Soar Past $105K in 2024?

Will Bitcoin Crash?" seems to be one of the most controversial questions, as the price…

3 hours ago

The Best Crypto for Passive Income? 10% Weekly Gains and 20% Final Surge—Qubetics Mirrors Cosmos’ Early Success!

There’s always that one coin people wish they hadn’t overlooked. For many, Cosmos ($ATOM) is…

3 hours ago

Cosmos Developer Interchain Foundation Sold 3000 ETH Today

Cosmos Developer Interchain Foundation sold 3000 ETH from its ICO today, totaling 21,600 ETH sold…

4 hours ago

This website uses cookies.