New DFS Regulatory Guidance on the Issuance of U.S. Dollar-Backed Stablecoins

The New York State Department of Financial Services (DFS) issued new Regulatory Guidance, setting foundational criteria for USD-backed stablecoins issued by DFS-regulated entities. Such stablecoins will have to be fully backed by reserves consisting only of U.S. Treasury securities and deposits at U.S. federal or state chartered banks,  held in segregated accounts and marked to market daily. Also, redemption at par must be guaranteed for all stablecoin holders. [Read more]

Digital Currencies and Energy Consumption

An IMF paper explores the main components and technological options that determine digital currency (DC) energy profiles. It finds that the energy consumption of non-proof-of-work (non-PoW) distributed ledger technology (DLT) platforms is orders of magnitude lower than that of PoW platforms. Also permissioned networks that exercise more control over who can join as a validator, are more energy efficient than unpermissioned networks. The paper concludes that DCs could be designed to use infrastructures that are less energy intensive than the current payment system. [Read more]

Custodia Sues Federal Reserve, Demanding Decision On Master Account

Crypto bank Custodia is suing the Federal Reserve Board and the Kansas City Fed charging they have “unlawfully” delayed for 19 months acting on its application for a master account with the Federal. The Wyoming-chartered  “special purpose depository institution’’ says the master account would reduce its costs and is “vital” to its core mission of providing a bridge between digital assets and the U.S. dollar system. According to the suit, the Fed has a legal obligation to act within a year and the application was made in October 2020. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]