A consortium of 74 Japanese firms, including the country’s three mega-banks, said it aims to launch a yen-based digital currency in fiscal 2022 after beginning trials in coming months. The digital currency, tentatively called “DCJPY”, will be backed by bank deposits and use a common platform to speed up large-scale fund transfers and settlement among companies. Crypto exchange DeCurret, which is leading the consortium, published a progress report and white paper. [Read more]
This paper, co-authored by Diem’s Chief Economist Christian Catalini, proposes that stablecoin issuers should comply with the capital and liquidity standards encoded in the Basel accords, and put aside appropriate capital buffers to mitigate credit risk, market risk, and operational risk. Furthermore, stablecoin issuers should hold appropriate liquidity to mitigate sudden redemptions and outflows. Compliance could be achieved with a balance sheet centered around short-maturity, high-quality, and liquid assets such as 3 months or less marketable government securities. [Download paper here]
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