Fed paper explores stablecoins’ impact on financial system
Researchers say stablecoins could be a ‘digital safe haven’ during volatility, but design choices matter
New research published by the Federal Reserve explores how different structures underpinning stablecoins can impact the financial sector and the wider economy.
Authors Gordon Liao and John Caramichael find a “two-tier” structure, where stablecoins are backed by commercial bank reserves, can both support stablecoin issuance and maintain credit intermediation.
A more radical design, a “narrow-bank” structure, where stablecoins are fully backed by central bank reserves, could be more stable but
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@fx-markets.com or view our subscription options here: https://subscriptions.fx-markets.com
You are currently unable to print this content. Please contact info@fx-markets.com to find out more.
You are currently unable to copy this content. Please contact info@fx-markets.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@fx-markets.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@fx-markets.com
More on Infrastructure
NatWest bridges FXPB and clearing for regional banks
New model maintains traditional OTC market access with added direct clearing option
Banks join forces for stablecoin builds
Three regional consortia gain traction; SG and Standard Chartered stay on solo track
Nomura weighs launching own stablecoin
Bank says issuing its own token is on the table, but wants to use stablecoins as a customer first
Bank vs non-bank: FX’s two-tier reality
CME and LSEG data show banks provide sticky and broad liquidity, while non-banks cling tightly to the price
CLS to launch CNH PvP settlement service
Plan will involve settling offshore renminbi in Hong Kong via a separate PvP session
Beyond FX HedgePool: what’s next for all-to-all?
Proponents see bright future for trading model, but obstacles to take-up remain
Fragmented rules obstruct tokenisation efforts, panellists say
Divergent US, UK and EU stablecoin rules and legal protections limiting cross-border growth
Dealers split on best path to electronically hedge FX swaps
IDB costs see banks eyeing Clobs and dark pools, but traders say brokers still have their charms
