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A version of the US House emergency stimulus bill dated March 22 includes a passage that, if passed, would lead to the creation of a “digital dollar” to be used for providing stimulus payments. The digital dollar is defined as “a balance expressed as a dollar value consisting of digital ledger entries that are recorded as liabilities in the accounts of any Federal [R]eserve bank; or an electronic unit of value, redeemable by an eligible financial institution (as determined by the Board of Governors of the Federal Reserve System).” The text also refers to a “pass-through digital dollar wallet” that “means a digital wallet or account, maintained by a member bank on behalf of a qualified individual, where such qualified individual is entitled to a pro rata share of a pooled reserve balance that the member bank maintains at any Federal [R]eserve bank.”
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David Longworth, former Deputy Governor of the Bank of Canada on the major macro-level risks arising from current and future digital financial innovation and what the implications are for Canadian regulators. Regulators should enact a number of policies, including requiring the use of Explainable AI (XAI) in lending decisions, taking care not to rush into open banking regulations, extending the coverage of stress tests to include stresses relating to borrowing from non-bank financial intermediaries, and increasing the amount of data on lending and short-term financing from lenders, whether regulated or not.
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Bitcoin derivatives exchange BitMEX continues to field criticism after attempting to explain a mass liquidation event during which BTC/USD crashed 60%. In this blog post BitMEX addressed questions from traders about the event and how its “insurance fund” works.
