The Hong Kong Monetary Authority (HKMA) is working with the People’s Bank of China (PBoC) on a pilot program to use the digital yuan (e-CNY) for cross-border payments. According to the HKMA, as the renminbi is already in use in Hong Kong and the status of e-CNY is the same as cash in circulation, it will bring even greater convenience to Hong Kong and Mainland tourists.
Rohan Grey, the legal scholar who helped draft the controversial Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act with Congresswoman Rashida Tlaib, wants you to know that he cares about anonymous digital cash—but he’s not about to give a free pass to those who he believes pose a systemic risk to the US monetary system.
U.S. Representative Maxine Waters, who chairs the House Financial Services Committee, wants President-elect Joe Biden to rescind or monitor all of the crypto-asset-related guidance issued by the Office of the Comptroller of the Currency (OCC). She called on Biden to rescind guidance by the OCC that national banks may hold stablecoin reserves as a service to bank customers, along with similar guidance that allowed federally chartered banks and federal savings associations to provide crypto-asset custody services for customers.
A payments revolution has prompted a proliferation of shadow digital money. This money is unsound. It is not insured by the government, nor is it backed by safe assets. Federal regulation is needed to guarantee safety and soundness, to restore full monetary control to the Federal Reserve, and to prevent a race to the bottom between competing state and federal regulatory regimes. The OCC should recommend that Congress enact new legislation that requires MSBs to back their monetary liabilities 1:1 with bank deposits. With this change, innovation in payments would be just that—innovation in payments—and not also unauthorized and unsound money issuance.