Fed, BOE officials share continued interest in CBDCs, stable coin regulation

The Federal Reserve Board continues to examine central bank digital currency (CBCC) or at least adjacent technologies, Vice Chairman Michael Barr said on October 27, 2007. John Cunliffe made his last speech as Deputy Governor of the Bank of England (BOE).

The federation's research is currently focused on “end-to-end system architectures,” such as ledgers and token-and-storage models for the central CBCC, Barr said in Washington. Barr repeated the Fed's mantra of no digital dollars without a congressional mandate, but added that “learning from domestic and international experiments will help decision makers understand how we can best support responsible innovation.”

Barr's comments aren't controversial on the surface, but they are reminiscent of Rep. Tom Emmer's call in the House of Representatives in September to stop the Fed's “draft” CBDC study.

Related: Stablecoin Market Escaping US Regulatory Control: Chainalysis

Cunliffe, whose 10-year term ends on October 31, spoke at the conference a day earlier. He also emphasized that no decision has been made on the CBDC in his country. But a consultation paper published in February said “current trends and technological developments in payments have reached a conclusion.” […] By the end of the decade, the digital pound was needed.

BOE Deputy Governor Sir John Cunliffe hid his excitement about the upcoming CBDC

Can you read between the lines anon? pic.twitter.com/RPq0Bv8J9P

— RōNIN (@ronin21btc) December 30, 2022

The consultation paper received 50,000 responses, Cunliffe said. Privacy, programming and cash flow were top concerns of commenters. More:

“If only a little tongue-in-cheek, I've noticed that criticism of the digital pound is out of fear. […] It threatens the disintegration of the banking system and financial stability, while at the same time it becomes a risk of no use and a ‘problem in search of a solution'.

Cunliffe envisioned that “private companies could integrate and program the digital pound as a settlement asset, into the services they offer to wallet holders.” The BOE will respond “in the coming months.”

Cunliffe has promised that the BOE will soon issue a discussion paper on stablecoin regulation. Barr also mentioned stablecoins, saying that regulation was necessary. This type of asset “lends the confidence of the central bank,” he said.

Journal: Unstable Coins: Debasement, Bankruptcy and Other Risks Looming.