the acting Federal Insurance Corporation Chairman Martin Gruenberg considers payment stablecoins as those used in real-time mainstream payments rather than existing currencies stablecoins, which are mainly used within the coding ecosystem. in Brookings Institution Today’s event, is He said Payment stablecoins should only be issued on the authorized blockchain.
Its rationale is the ability to know all participants, including nodes and auditors, to enforce penalties and comply with AML.
In response to a question after his speech, he said, “An unauthorized public blockchain poses enormous challenges in terms of basic supervisory responsibility for safety and safety, consumer protection and anti-money laundering. (Re)the possibility of having an authorized blockchain where you can address these issues. If you are going to consider using The technology within the banking system, it seems to us, has much greater potential.”
Gordon Liao, Chief Economist, USDC stablecoin issuer Circle, commented on a panel after the event, “We agreed on unauthorized internet, which really proved its worth. No silos where you can only send email within your own network.” To address the concerns raised, he cited blockchain analytics as a tool to combat money laundering and enforce OFAC sanctions lists.
In addition, Gruenberg wants the FDIC to see stablecoin Prudential-regulated issuers and stablecoins backed by short-term Treasuries.
Are stablecoins used for real-world payments?
Circle’s Liao has agreed to strongly support payment stablecoins. “Where I think the chairman may have missed the mark is the value of the cryptocurrency interest that is appearing at the moment. In addition to the issuance of the bank versus the issuance of non-bank coins for stable payments,” Liao said.
Gruenberg had previously commented on crypto assets in general, “So far, we haven’t seen much evidence of profiting from the crypto-asset activity,” particularly in relation to financial inclusion.
Circle’s Liao identified the ability of stablecoins to reduce the costs of cross-border payments, including low-value transfers.
The regulators assume that the current stablecoins are used entirely for cryptocurrency activities. Liao highlighted that the purpose of many stablecoin transactions is not always clear. For example, 75% of USDC wallets are below $100 and only 10% of USDC is held on exchanges. He later stated that 25% of transactions are person-to-person, and do not involve a smart contract.
“So it is not entirely clear how much of the payment activity is in the real world as opposed to speculative activity,” Liao said. (Author’s note: I’ve used USDC to make a few real-world payments). However, it is likely that the majority of the value traded is within the crypto ecosystem.
Regarding the restriction on the issuance of stablecoins by banks, Liao noted that the major financial crisis was partly due to risky products and partly because the banks were too big to fail.
“By separating the payment functions from banking, starting with a convenient way of regulating stable payments and providing access to the Federal Reserve for non-banks, this can pave the way for reducing overall financial system risks,” Liao said. In the past, Circle has stated that it intends to become a bank.
#FDIC #chief #stablecoins #pay #authorized #blockchains #Ledger #Insights