The Federal Reserve is not in a hurry to launch a central bank digital currency (CBDC), according to one of its governors. In a speech at the Peterson Institute for International Economics, Lael Brainard said that the Fed is still studying the benefits and risks of a CBDC, and that there are many unresolved issues that need to be addressed before making a decision.
Brainard argued that a CBDC would have significant implications for the financial system, the economy, and the role of the dollar as a global reserve currency. She said that a CBDC would need to be designed carefully to ensure that it does not undermine financial stability, monetary policy, or consumer protection. She also said that a CBDC would need to be interoperable with existing payment systems and compatible with international standards.
Brainard acknowledged that there are potential advantages of a CBDC, such as enhancing financial inclusion, reducing costs and frictions, and improving cross-border payments. However, she also pointed out some of the challenges and risks, such as cyberattacks, privacy issues, illicit activities, and competition with private sector innovations. She said that the Fed is collaborating with other central banks and researchers to learn from their experiences and experiments with CBDCs.
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Brainard concluded that the Fed is committed to ensuring that the US payment system remains safe, efficient, and inclusive, but that it does not see an urgent need to issue a CBDC at this time. She said that the Fed will continue to engage with stakeholders and the public to solicit feedback and input on this important topic.
Mountain Protocol to strengthen USDM liquidity.
Wintermute, a leading algorithmic market maker for decentralized finance (DeFi) protocols, has announced a strategic partnership with Mountain Protocol, a novel stablecoin issuer that aims to create a more resilient and scalable US dollar-pegged token. The partnership will enhance the liquidity and stability of USDM, Mountain Protocol’s flagship stablecoin, which is backed by a diversified basket of crypto assets and governed by a decentralized autonomous organization (DAO).
USDM is designed to address some of the challenges faced by existing stablecoins, such as over-collateralization, centralization, and regulatory uncertainty. By leveraging Mountain Protocol’s innovative mechanism of dynamic collateral rebalancing, USDM can maintain its peg to the US dollar even in volatile market conditions, while minimizing the risk of liquidation and governance interference. USDM holders can also benefit from the protocol’s revenue-sharing model, which distributes a portion of the fees generated by the system to the DAO treasury and the USDM community.
Wintermute will provide liquidity for USDM across multiple DeFi platforms, including decentralized exchanges (DEXs), lending protocols, and yield aggregators. Wintermute will also support the growth and adoption of USDM by participating in the protocol’s governance and collaborating with other ecosystem partners. Wintermute’s expertise and experience in market making and DeFi will help USDM achieve greater efficiency, security, and accessibility for users and traders.
Evgeny Gaevoy, CEO of Wintermute, said: “We are excited to partner with Mountain Protocol, one of the most innovative and promising projects in the stablecoin space. We believe that USDM has the potential to become a leading alternative to existing stablecoins, offering users more value, transparency, and control. We look forward to working with the Mountain Protocol team and community to make USDM a widely used and trusted stablecoin in DeFi and beyond.”
Co-founder of Mountain Protocol said: “We are thrilled to have Wintermute as our strategic partner and liquidity provider. Wintermute is a renowned and respected market maker in the crypto industry, with a deep understanding of DeFi and its challenges.
Their support will be instrumental in enhancing the liquidity and stability of USDM, as well as expanding its reach and adoption across various DeFi platforms. We are confident that together with Wintermute and our other ecosystem partners, we can build a more resilient and scalable stablecoin that can serve the needs of the global crypto community.”