CFTC asks for more information about Stablecoins and the possibility of a new U.S. CBDC project in the near future.
The CFTC (Commodity Futures Trading Commission) organised a meeting this past week to discuss stablecoins. This meeting was between its Technology Advisory Committee and representatives of three stablecoin developers earlier this week. Representatives from MakerDAO, JP Morgan Chase, and Paxos attended. During this meeting, they spoke in detail about their stablecoin projects, and answered questions to assist in understanding them.
CFTC Commissioner Brian Quintenz headed the open meeting. He outlined that the main points that would be examined would include self-regulation along with crypto insurance and custody. In his opening statements, Quintenz sounded optimistic about the prospect of gathering more information to pave the way for better collaboration.
First, CEO of Paxos Charles Cascarilla shared his company’s two flagship stablecoin products. Paxos Standard (PAX), is designed to be a 1:1 digital currency match to the dollar. Their second project, PAX Gold, is a digital currency backed by the gold standard.
Next spoke Eddie Chen, Global head of Digital Markets at JP Morgan Chase. He described the JPM Coin as a digital representation of the U.S. dollar. This coin will be involved with designated accounts, and used between clients.
COO of MakerDAO Steven Becker spoke in regards to the concepts and misconceptions of decentralised finance models, and the finer points of their Dai stablecoin.
Then, Tomasso Mancini-Griffoli, Deputy Division Chief in the Monetary and Capital Markets Department of the IMF covered several of the main points that have to be considered when approaching these new stablecoin projects in implementation. These included financial stability, monetary policy control, privacy, competition, efficiency, consumer protection, and financial integrity.
U.S. is no stranger to the digital dollar movement.
This echos the interest the U.S. government has had in the development of a potential central bank digital currency (CBDC). The former chairman of the Commodity Futures Trading Commission Christopher Giancarlo gave rise to this last week. He stated during an interview with Yahoo that this would be key in combating China’s own CBDC.
Giancarlo added that the Digital Dollar will be independent of any other digital currency. He elaborated on the fact that the landscape of the digital currency world is going to change. In addition, it is the the CFTC’s responsibility to keep up with this change.
While it stands to make sense for regulatory bodies to keep abreast of this for their own good, individuals stand to benefit as well. The use of a Digital Dollar would simplify the fees for online transactions. As it stands, this would allow consumers to avoid any intermediary fees associated with traditional credit and debit cards.