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U.S. is not moving fast enough to establish a CBDC, says former CFTC chair

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U.S. is stagnating quickly enough to develop a CBDC, states previous CFTC chair

Tim Massad, who functioned as chair of the Commodity Futures Trading Commission till 2017, stated the United States is too sluggish in developing a strategy to modernize its payment systems.In a Wednesday hearing of the Joint Economic Committee on the function of digital possessions in federal government, Massad stated a reserve bank digital currency, or CBDC, could be one option for the United States to enhance its existing payments systems, which he referred to as “sluggish”and “expensive.”In addition, the former CFTC chair stated while stablecoins might be utilized for this purpose, they also presented a few of the most immediate obstacles for U.S. regulators and present substantial threats. Massad stated that people using stablecoins like Tether(USDT)to move funds between exchanges was an excellent example

of why the U.S. payment system needs to be improved. However, he included the stablecoin company’s reserves were most likely not bought “highly safe liquid properties”like the dollar and therefore not insured in the same way as funds in conventional banks. The former CFTC head stated his recommendation would be to adopt “bank-like”guidelines however also prevent providers from making loans to eliminate the requirement for deposit insurance coverage.” CBDCs, stablecoins and digital properties typically are often cited as a method to accomplish higher monetary addition, and we must consider their potential for doing

so, “stated Massad.”We must act now to improve access to monetary services through other methods too– the requirement is undue.” Related: Previous CFTC chair discusses why regulators must approve a Bitcoin ETF Coin Center director of research study Peter Van Valkenburgh, likewise in participation at the hearing, called stablecoins an”

fascinating area”in the crypto area but voiced concerns about the seeming lack of regulative clearness for companies.” There are

definitely some stablecoin issuers who are violating the law, “said Van Valkenburgh, adding: “There are also controlled stablecoin companies and there is also the possibility of developing more of a federal house for regulation of stablecoins. We don’t have a legal gap there, I believe– we just have an enforcement space.”The comments from both Van

Valkenburgh and Massad come following a report from the President’s Working Group on Financial Markets suggesting that stablecoin companies in the U.S. need to go through” appropriate federal oversight”

comparable to that of banks. The group said legislation is”urgently needed to thoroughly address the prudential risks postured by payment stablecoin plans.”Released at Wed, 17 Nov 2021 22:00:00 +0000

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