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Pomp says US digital dollar needs to happen now

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Recent comments from Jerome Powell, the chairman of the United States Federal Reserve, show the American government is not especially concerned with speed when it comes to developing a central bank digital currency, or CBDC. In contrast, Morgan Creek Digital co-founder Anthony Pompliano argues that time is of the essence.  

“They’re talking about, like, maybe we’ll build one in the next couple of years,” Pompliano said of Powell’s recent comments on CBDCs. “This is not a next-couple-of-years thing,” Pomp said Monday on an episode of his YouTube show Lunch Money.

“This is a right-now thing, and if they don’t act, the U.S. is going to fall really far behind China because it all comes down to accessibility.”

Powell expressed the importance of accuracy over speed when it comes to issuing a CBDC during a discussion about cross-border payments on Monday. “We have not made a decision to issue a CBDC, and we think there’s a great deal of work yet to be done,” Powell said, placing greater focus on building a CBDC correctly than winning the digital currency race. 

Meanwhile, China continues moving forward with its CBDC pursuits and has already begun testing its digital yuan.

Pompliano explained the importance of accessibility. “If I’m sitting somewhere in the world and I can use the internet connection and I want a global currency, can I get a yuan, or can I get the dollar?” he noted. Based on Pompliano’s comment, people may gravitate toward the easiest solution, which could be China’s CBDC if it becomes the dominant digital option before the U.S. enters the game. 

Pompliano joined CNBC for an interview in September 2019, during which he expressed the importance of a digital U.S. dollar. After a year of CBDC interest from numerous countries around the globe, Pompliano’s comments still remain relevant. 



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New York authorizes first Yen stablecoin operator in the US

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New York has given the first authorization to a stablecoin backed by the Japanese Yen to operate in the U.S.

Per a Dec. 29 announcement, the New York Department of Financial Services has granted Japanese firm GMO-Z.com a charter to handle U.S.D. and Yen-backed stablecoins in New York. 

Given New York’s status as a global center, the NYDFS is the most prominent state financial regulator in the U.S. It is also one of the most aggressive. A pass to operate in New York often opens up the rest of the country. 

GMO’s charter is as a limited liability trust company rather than a full bank, the principle difference being in authorization to handle deposits. While a stablecoin operator typically needs the ability to hold reserves of the pegged asset, GMO’s charter limits its rights to hold other kinds of deposits not central to its ability “to issue, administer, and redeem” its stablecoins. 

The right to issue such non-depository charters has been a bone of contention between state regulators like the NYDFS and national banking regulators in the U.S. 

GMO president and CEO Ken Nakamura said: “We’re breaking ground with our move to issue the first regulated JPY-pegged stablecoin, which many see as a safe haven asset.” 

The NYDFS recently made changes to its famous BitLicense, including a conditional format that buddies up newly licensed firms with existing licensees. The first conditional BitLicense went to PayPal, facilitating the launch of its new crypto services earlier this fall with the help of longstanding licensee Paxos.