“A bond-backed currency would overcome problems created by incomplete monetary union”
The MakerDAO project launches its upgraded multi-collateral Dai stablecoin today. To the relief of many, it will not include traditional assets as accepted forms of collateral just yet. Cryptocurrency Exchange, Coinbase, has already announced support for the upgraded token from 2nd December.
“The release of Multi-Collateral Dai (MCD) is only 10 days away and will mark a huge milestone reached for the MakerDAO project. MCD will introduce exciting new features to the Maker Protocol, including the much-anticipated Dai Savings Rate (DSR) and, of course, additional collateral asset types. “
Dai, launched in 2017, seeks to dodge such concerns by giving up control of the ethereum coins its value is tied to, locking them instead in the blockchain contracts run by algorithms. That, supporters say, offers the benefits of stablecoins – instant transactions and steady value – while avoiding governance risks.
CBDC can be designed with attributes similar to cash or deposits, and can be interest-bearing: a CBDC that closely competes with deposits depresses bank credit and output, while a cash-like CBDC may lead to the disappearance of cash. Then, the optimal CBDC design trades off bank intermediation against the social value of maintaining diverse payment instruments. When network effects matter, an interest-bearing CBDC alleviates the central bank’s tradeoff.
Visa has developed a blockchain system called LucidiTEE that could upend how banks transfer customer transaction data to consumer financial applications like Mint and Credit Karma.
Posted from Diigo
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Published by kiffmeister
The Kiffmeister is a former Senior Financial Sector Expert at the International Monetary Fund.
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