The crypto world has taken a beating since the FTX disaster, which reverberated through the entire system in recent months, and this week witnessed a solvency crisis at crypto-focused bank Silvergate Capital (SI). However, Bitcoin (BTC-USD) (+34% YTD), Ethereum (ETH-USD) (+29% YTD) and other tokens have managed to shake off the headlines, and talk of a more centralized industry is heating up again. In fact, Nellie Liang, Treasury Undersecretary for Domestic Finance, shed some light on the possible launch of a digital dollar, as she leads a new senior-level working group that will explore central bank digital currencies.Snapshot: Popularly known as CBDCs, these tokens would represent a nation's fiat currency, and became notable after President Biden signed an executive order on cryptocurrency policy (see what SA contributor Allard Peng said it would mean for DeFi at the time). Current discussions center around whether a CBDC would preserve the dollar's global strategic role with regards to the architecture of the international financial system, and benefit U.S. households in terms of lowering transaction and borrowing costs. Other priorities include preserving national security, protecting privacy and preventing illicit financial transactions.Liang also noted that CBDCs are only one of several options for upgrading the Fed's legacy capabilities in terms of efficiency and competitiveness. Another one is real time payment systems, like the FedNow Service, which is expected to launch later this year. "There are also risks of a retail CBDC, including the potential for runs into a retail CBDC that could destabilize private sector lending during stress periods," she added. "The Fed is conducting technology research and experimentation to inform design choices so that it is positioned to issue a CBDC if it were determined to be in the national interest."How do CBDCs differ from electronic cash? When money is deposited into a bank account, the commercial entity takes responsibility for the sum. The cash is then held in electronic form and can be used across a variety of platforms, but it's limited to the bank's ledger. In the case of CBDCs, the government is the counterparty and takes liability for the money, while the ledger that's being used (known as the rails) can be a very different structure than a commercial institution. (23 comments)
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| | Top News  Getty Images The crypto world has taken a beating since the FTX disaster, which reverberated through the entire system in recent months, and this week witnessed a solvency crisis at crypto-focused bank Silvergate Capital (SI). However, Bitcoin (BTC-USD) (+34% YTD), Ethereum (ETH-USD) (+29% YTD) and other tokens have managed to shake off the headlines, and talk of a more centralized industry is heating up again. In fact, Nellie Liang, Treasury Undersecretary for Domestic Finance, shed some light on the possible launch of a digital dollar, as she leads a new senior-level working group that will explore central bank digital currencies.
Snapshot: Popularly known as CBDCs, these tokens would represent a nation's fiat currency, and became notable after President Biden signed an executive order on cryptocurrency policy (see what SA contributor Allard Peng said it would mean for DeFi at the time). Current discussions center around whether a CBDC would preserve the dollar's global strategic role with regards to the architecture of the international financial system, and benefit U.S. households in terms of lowering transaction and borrowing costs. Other priorities include preserving national security, protecting privacy and preventing illicit financial transactions.
Liang also noted that CBDCs are only one of several options for upgrading the Fed's legacy capabilities in terms of efficiency and competitiveness. Another one is real time payment systems, like the FedNow Service, which is expected to launch later this year. "There are also risks of a retail CBDC, including the potential for runs into a retail CBDC that could destabilize private sector lending during stress periods," she added. "The Fed is conducting technology research and experimentation to inform design choices so that it is positioned to issue a CBDC if it were determined to be in the national interest."
How do CBDCs differ from electronic cash? When money is deposited into a bank account, the commercial entity takes responsibility for the sum. The cash is then held in electronic form and can be used across a variety of platforms, but it's limited to the bank's ledger. In the case of CBDCs, the government is the counterparty and takes liability for the money, while the ledger that's being used (known as the rails) can be a very different structure than a commercial institution. (23 comments)
| | Featured  What can $5 buy you at the mall today? Not much. But if you choose wisely, $5 can make a big difference to how you invest. Seeking Alpha Premium is the best source of analysis for almost any investment out there - not only the trending tickers. Thanks to Seeking Alpha's diverse pool of contributors and community debate, you get the bull and the bear perspective on 1000s of stocks. You'll be able to make the most informed buy, hold or sell decisions for your portfolio. Right now you can join Premium for the incredibly low price of $4.95 for your first 30 days. (You can cancel within the first 30 days, after which your annual subscription will kick in at $239 per year.) Get the edge you need to win by joining the leading community of engaged investors today. Go Premium nowIntroductory offer for new subscribers only. After 30 days, $239 will be charged automatically for an annual subscription. Auto-renews as annual subscription at the then current annual list price. Past performance is no guarantee of future results. | | Outlook Equities gained traction in the middle of session on Thursday following comments from Atlanta Fed President Raphael Bostic, who said the central bank could be in a position to pause rate hikes this summer. Major U.S. equity averages finished higher, allowing the S&P 500 ( SP500) and Nasdaq ( COMP.IND) to halt a two-session slide. The job market "continues to run unsustainably hot, and that inflation is not coming down as fast as I had thought," countered Fed Governor Christopher Waller, who added that "wishful thinking is not a substitute for hard evidence in the form of economic data." Rising interest rates have seen mortgage prices climb this week above their 52-week average, while recent reports suggest that Blackstone ( BX) just defaulted on a €531M mortgage-backed bond. ( 56 comments) | | Trending In the wake of Norfolk Southern's ( NSC) train derailment disaster in East Palestine, Ohio, Transportation Secretary Pete Buttigieg wrote the CEOs of the seven major railroads to ask them to join the Federal Railroad Administration's Confidential Close Call Reporting System. Despite years of refusing to do so, Association of American Railroads CEO Ian Jefferies just replied to Buttigieg that all seven Class I railroads will join the program. Specifically, AAR wants FRA to improve the quality and speed of reporting, ensure that reports are kept confidential, take steps to prevent employee misuse of the program, and share information in a more timely manner. Earlier this week, Barclays saw upside in rail stocks despite downbeat investor sentiment. ( 8 comments) | | | | | Today's Markets In Asia, Japan +1.5%. Hong Kong +0.7%. China +0.5%. India +1.5%.
In Europe, at midday, London +0.2%. Paris +0.7%. Frankfurt +1.1%.
Futures at 6:30, Dow +0.2%. S&P +0.3%. Nasdaq +0.4%. Crude -0.5% to $77.81. Gold +0.7% to $1853. Bitcoin -4.6% to $22,347.
Ten-year Treasury Yield -7 bps to 4.00%
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