What’s left? The new plans envision
- Several stablecoins tied to existing fiat currencies rather than (or in addition to) to the originally planned currency basket.
- No more “permissionless” transactions, no more “censorship resistance.”
- Vetting of new wallets by the operator (KYC, AML).
The new Libra White Paper.
Teunis Brosens and Carlo Cozucco in ING’s THINK.
Kiran Stacey and Hannah Murphy in the FT.
Philip Sandner and Jonas Gross in Medium.
Updated (April 25): Eichengreen and Viswanath-Natraj on VoxEU.
The BIS has published a report on stablecoins. On Alphaville Izabella Kaminska approves but argues that the report does not contain novel points. One aspect discussed in the report concerns the benefit of stablecoins for cross-border payments; it may be limited unless technology is able to address the key friction:
A major obstacle to the interlinking of domestic payment systems and/or the development of shared global payment platforms is differing legal frameworks across jurisdictions and the associated uncertainty about the enforceability of contractual obligations resulting from participation in interlinked or shared payment platforms operating across borders.
See the VoxEU series on the topic.
In the FT, Robert Armstrong reports about the new “JPM coin” launched by JP Morgan.
“JPM Coins” will be transferable over a blockchain between the accounts of the bank’s corporate clients, who will purchase and redeem them for dollars at a fixed 1:1 ratio, making them “stablecoins” in the crypto-jargon.
The technology will facilitate near-instantaneous settlement of these money transfers and will, according to the bank, mitigate counterparty risk.
According to my reading, the coins are essentially bank deposit that live on a blockchain which is managed by JP Morgan and accessible by the bank’s clients. I doubt that a coin will be redeemable for US dollars issued by the Federal Reserve (as opposed to deposits issued by JP Morgan).