My posts this week may get a bit spotty, as I’ll be in Washington DC for the Georgetown University DC Fintech Week, the CBDC Think Tank Summit, and various activities around the International Monetary Fund / World Bank Annual Meetings.

FSB warns stablecoins aren’t ‘stable’, recommend action around crypto assets

The Financial Stability Board (FSB) released two crypto-related reports, one on high-level recommendations for crypto-asset regulation that prescribes a “same activity, same risk, same regulation,” approach to digital assets, and the other an assessment of how broadly stablecoin issuers would meet the “high-standard” criteria set by the group in 2020. Citing limits on redemptions, including the ability to delay or deny them, the FSB found that most users have to sell stablecoins on exchanges in order to liquidate them, and the price could drop below the value of the currency that the coin is pegged to. The FSB also cast doubt on how most stablecoins would be able to maintain their pricing under market stress. [Read more at the FSB]

Ensuring adoption of central bank digital currencies – An easy task or a Gordian knot?

The European Central Bank (ECB) published a paper that surveys the key elements involved in the adoption new means of payment and discusses failed and ongoing initiatives with public digital money. It concludes that ensuring the desired level of adoption of retail central bank digital currency (CBDC) may impose significant constraints on central bank design choices and policy goals. In fact, in some settings, central banks may find themselves on the horns of a dilemma in seeking to balance the needs to (i) preserve the central bank’s hierarchy of policy goals, (ii) increase the chances of adoption and use of retail CBDC by consumers and retailers, and (iii) avoid any adverse economic effects. [Read more at the ECB]

OECD Releases New Global Tax Reporting Framework for Crypto Assets

The Organization for Economic Co-operation and Development (OECD) released its new tax reporting framework, the Crypto-Asset Reporting Framework (CARF). [Read more at the OECD]

Kiffmeister’s Global Central Bank Digital Currency Monthly Monitor

Just a reminder that I produce a monthly digest of central bank digital currency (CBDC) developments exclusively for the official sector. So for any of you out there who work for a central bank, ministry of finance or international financial institution who would like to receive it by email on the first business day of every month, please DM me on LinkedIn or email me at chronicles@kiffmeister.com.