US Treasury report encourages instant payment and recommends more research on CBDCs
In one of three reports released simultaneously on Friday, the Treasury Department speaks cautiously about stablecoins and the CBDC in the context of broader payment technology.
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United States President Joe Biden ordered more than a dozen reports when he issued Executive Order 14067 “Ensuring Responsible Development of Digital Assets.” Five had due dates within 90 days, and the last three were issued simultaneously by the Treasury Department on September 16. The reports have been prepared in response to the instructions in Sections 4, 5 and 7 of the OS.
The report commissioned in Section 4 of the EO is titled "The Future of Money and Payments". The report examines the various payment systems currently in use that are operated by the Federal Reserve or the Clearinghouse, which is owned by a group of major banks. These will be complemented by the non-blockchain instant payment system FedNow Service which is expected to start operating in 2023.
Stablecoins are introduced with FedNow under the title "Recent Innovations in Money and Payments". They are the subject of a somewhat superficial discussion that examines potential deficits in reliability and Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) capability, about which he concludes:
“Financial institutions that trade stablecoins are subject to AML/CFT obligations. However, if a stablecoin were widely adopted globally as a means of payment, the stablecoin could pose greater funding risks illicit due to uneven implementation of global AML/CFT standards for digital assets.”
Most of the report is devoted to a central bank digital currency (CBDC). Although the report raises issues such as paying interest on a CBDC, the cost of operating a CBDC, and public-private partnerships, the discussion focuses heavily on the risks.
Related: White House Releases 'First' Comprehensive Crypto Framework
The interplay between CBDCs and privacy is given subtle attention:
"While physical silver may enable anon...
In one of three reports released simultaneously on Friday, the Treasury Department speaks cautiously about stablecoins and the CBDC in the context of broader payment technology.
New
United States President Joe Biden ordered more than a dozen reports when he issued Executive Order 14067 “Ensuring Responsible Development of Digital Assets.” Five had due dates within 90 days, and the last three were issued simultaneously by the Treasury Department on September 16. The reports have been prepared in response to the instructions in Sections 4, 5 and 7 of the OS.
The report commissioned in Section 4 of the EO is titled "The Future of Money and Payments". The report examines the various payment systems currently in use that are operated by the Federal Reserve or the Clearinghouse, which is owned by a group of major banks. These will be complemented by the non-blockchain instant payment system FedNow Service which is expected to start operating in 2023.
Stablecoins are introduced with FedNow under the title "Recent Innovations in Money and Payments". They are the subject of a somewhat superficial discussion that examines potential deficits in reliability and Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) capability, about which he concludes:
“Financial institutions that trade stablecoins are subject to AML/CFT obligations. However, if a stablecoin were widely adopted globally as a means of payment, the stablecoin could pose greater funding risks illicit due to uneven implementation of global AML/CFT standards for digital assets.”
Most of the report is devoted to a central bank digital currency (CBDC). Although the report raises issues such as paying interest on a CBDC, the cost of operating a CBDC, and public-private partnerships, the discussion focuses heavily on the risks.
Related: White House Releases 'First' Comprehensive Crypto Framework
The interplay between CBDCs and privacy is given subtle attention:
"While physical silver may enable anon...
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