CFTC Holds A Meeting With Different Stablecoin Projects to Understand The Industry

Over the last two-three years, a number of companies from the crypto and financial space have been working on launching its own stablecoins. Stablecoins are digital currencies whose price is tied to relatively fixed assets like fiat currency or a commodity.

Looking at the quick developments in this sector, America’s derivatives regulator - The Commodity Futures Trading Commission - has shown willingness to understand this industry by sitting down with major stablecoin projects.

Last week on February 26, the Technology Advisory Committee for CFTC held a public meeting to learn about crypto-insurance, stablecoins, cybersecurity, and custody practices.

Three major stablecoin projects including Praxo, JPM Coin, and MakerDao attended this meeting several aspects and potential use cases of stablecoins during the meeting. Besides, the committee also discussed a variety of topics on stablecoins.

Paxos CEO Charles Cascarilla spoke on the use-cases of two of Paxos’ existing stablecoin projects. Similarly, Eddie Wen, Global Head of Digital Markets, talked about the use-cases of JPM Coin and the latest developments of the project.

The JPM Coin was launched by Wall Street banking giant JP Morgan Chase last year in 2019. The bank launched this coin for making instant payment settlements for its global clients.

In his opening statement, CFTC Commissioner Brian Quintenz said that the JPM coin has been designed as the digital representation of the U.S. Dollars that are held at the designated accounts in JP Morgan Chase. As said these JPM Coins will be used for instantaneous payment transfers among JP Morgan’s institutional clients, done over the blockchain platform.

Besides, the CFTC Commissioner also referred to stablecoins as liquid exchange mediums in the near future. The commissioner said: “In the furtherance of providing such correlated value, stablecoins have the potential, through tokenization, to function as viable, liquid mediums of exchange and serve as powerful enablers of smart contracts.” 

Tomasso Mancini-Griffoli, Deputy Division Chief in the Monetary and Capital Markets Department of the IMF said that there should be a public policy taken into consideration for stablecoins.

This policy should ensure several issues like monetary policy control, financial stability, consumer protection, privacy, efficiency, and financial integrity.

Looking at the global developments in CBDCs, the U.S. government is also looking to introduce the Digital Dollar in their economy. Former CFTC chairman Christopher Giancarlo has backed the Federal Reserve in issuing a fully digital currency.