TL;DR Breakdown
- Top officials of the US-EU financial regulatory agencies held a virtual meeting last week.
- Delegates discussed about the COVID-19 pandemic stimulus package, stablecoins and CBDC.
- Janet Yellen says CBDCs could help unbanked Americans but is wary of Bitcoin.
Officials of financial regulatory agencies from the EU and the US on the 24th and 25th of March held a virtual meeting of the Joint Financial Regulatory Forum to deliberate on a variety of issues. Some of the topics discussed include stimulus relief plans for the COVID-19 pandemic, financial sustainability as well as central bank digital currencies (CBDCs) and stablecoins.
Members of the US delegation to the forum included senior officials from the Securities and Exchange Commission (SEC), the Department of Treasury and high ranking officials of independent regulatory agencies. Their EU counterparts were drawn from the Europe’s Central Bank , European Commission (EC) and several other regulatory agencies.
Six key areas in discussion
In all, six key topic areas were discussed during the two day virtual meeting. The talk centered on the burning issue of the COVID-19 pandemic stimulus package and how to reduce the economic impact on the nations. The US officials also touched on climate change and how it constitutes potentially an economic risk. They also highlighted multilateral partnerships in the financial regulatory and banking sectors within the stock markets.
The members of the forum also talked about current regulatory developments and new assets class including cryptocurrencies, stablecoins and CBDCs. They also touched on curbing money laundering as well as proffering solutions to terrorism financing.
Potential US CBDC in the offing?
Although there are no concrete plans by the U.S to issue a central bank digital currency, Boston’s branch of the Federal Reserve have carried out a study on the possibilities of a central bank digital currencies. This initial research work was done in collaboration with Massachusetts Institute of Technology (MIT). The research findings have attracted prominent opposition.
Notable among these skeptics, the American Banking Association opines that a central bank digital currency would take the payment systems several years backwards. In truth, their fear is they may be left out of the scheme of things should central bank digital currencies come to fruition.
Janet Yellen, the US Treasury Secretary, is of the opinion that a CBDC project would grant access to unbanked Americans. She however doesn’t share same optimism for other crypto assets. Yellen recently said that Bitcoin was very speculative and is not an efficient way of carrying out financial transactions. She was also concerned about the issue of crypto misuse. This is not the first time such meetings have been held amongst top officials.
