The British Financial Times: Why should the world be worried about stable currencies
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A few months ago, my son-in-law, who lived in New York State, sent a large amount of money to his family in England. However, the money was delayed. Worse still, there is no trace of the money. His bank calledUsedThe intermediary bank, however, was told that the British collecting bank, one of the largest banks in the United Kingdom, refused to respond to any queries. I asked my colleagues what might have happened, and they said it might have to do with money-laundering. Meanwhile, my father-in-law was anxious. Two months later, the money suddenly appeared in his account. He knew nothing about what had happened during that period。
This situation is quite different from my previous experience of remittances between the United Kingdom and the European Union. Remittances have been reliable and fast across the Atlantic. This may be one of the reasons why Americans are happy to accept “stable currency” as an alternative to the banking system. Daniel DayVisDaniel Davies)Two other reasons were identified:- YesUnited StatesCredit card paymentIt's relatively highCosts of cross-border remittancesIt's so high。Both reflect the failure of the United States to effectively regulate the powerful oligarchiesI don't know。
Jillian Tate of the Financial TimesGillian TettAnother motivation for the Trump Government to welcome the currency of stability was presented in an article last month. Scott Becent, United States Treasury (United States of America)Scott BessentThere is a problem:America needs the world to hold at lower interest ratesBigUnited States Treasury。She saysOne solution would be to promote the widespread use of dollar-denominated stabilizers, not at the domestic level, but at the global level。As Tate had pointed out, it would be in the interest of the United States Government。
However, none of this is a welcome dollar stabilizationJustificationI don't know. As stated by Hélène Rey of the London Business School, “for other parts of the world, including Europe, the widespread use of dollar-stabilized currency for payment is equivalent to the privatization of seigniorage taxes by global participants”. That would be another predatory move by the super-Power。More rational choiceYes, America canShift to lower-cost payment systems and reduce volatile government spendingI don't know. But..Neither is likely to happenI don't know。
All in all, the stabilizer..Advertised asDigital alternatives to statutory currency (particularly the United States dollar) — seem promising. As Tet points out, “The size of the stable currency sector is projected to increase from $280 billion to $2 trillion by 2028 by institutions such as Standard Chartered Bank”。
The future of a stable currency may indeed be bright. But should it be welcomed by anyone other than the issuer, the various criminals and the United States Treasury Department? The answer is no。
That's right, a stable currency is much more stable than a currency like that. But their so-called “stability” may well be a “fake” compared to cash dollars or bank deposits。
InternationalIMFI don't knowOECDandBANK FOR INTERNATIONAL SETTLEMENTS (BIS)SERIOUS CONCERNS WERE EXPRESSED. INTERESTINGLY, THE BIS WELCOMES THE CONCEPT OF “DINETIZATION”: IT IS THEIR VIEW THAT “A SINGLE BOOK OF ACCOUNTS CAN TAKE FULL ADVANTAGE OF THE MONETIZATION BY CONSOLIDATING THE CENTRAL BANK RESERVES, COMMERCIAL BANK FUNDS AND FINANCIAL ASSETS THAT ARE MONETIZED INTO THE SAME PLATFORM”
HOWEVER, THE BIS IS ALSO CONCERNED THAT THE STABILIZATION CURRENCY CANNOT PASS “THE THREE KEY TESTS OF HOMOGENEITY, RESILIENCE AND INTEGRITY”. WHAT DOES THAT MEAN? SINGLENESS MEANS THAT ALL FORMS OF A GIVEN CURRENCY MUST AT ALL TIMES BE CAPABLE OF BEING CONVERTED INTO EQUIVALENTS. THIS IS THE BASIS FOR MONETARY TRUST. FLEXIBILITY IS THE ABILITY TO MAKE SMOOTH PAYMENTS OF ALL SIZES. INTEGRITY REFERS TO THE ABILITY TO DETER FINANCIAL CRIME AND OTHER ILLEGAL ACTIVITIES. CENTRAL BANKS AND OTHER REGULATORS PLAY A CENTRAL ROLE IN ALL THIS。
These requirements are far from being met: they are non-transparent, easy to use by criminals and valuableFull of uncertaintyI don't know. Last month, the standard global rating lowered Tether's USDT rating to “weak”. This is not a trusted currency. Private currencies often underperformed during crises, and stable currencies were likely to survive。
Assuming that the United States intends to promote a stable currency for regulatory easing, this is partly to consolidate the dominance of the dollar and thus finance its large fiscal deficit. So what should other countries do? The answer is to do our best to protect themselves. This is particularly true for European countries. After all, the new national security strategy of the United States has clearly demonstrated its open hostility towards a democratic Europe。
European countries therefore need to consider how to introduce more transparent, well-regulated and safer stable currencies in their national currencies than the US might currently introduce. The Bank of England's approach seems sensible: just last month, it proposed that “Proposed regulatory regime for a systematic pound stabilization currencyIt states that “the use of a regulated and stable currency can lead to faster and cheaper retail and wholesale payments and enhance their functionality, both domestically and across borders”. This seems to be..CurrentBest starting point。
Now the Americans in power seem very interested in large technology companiesThatQuick action, breaking the rules. In monetary terms, this could have disastrous consequences. It is true that we have reason to use new technologies to create faster, more reliable and safer currency and payment systems. The United States certainly needs such a system. But a system that makes false stability commitments, fosters irresponsible fiscal policies and facilitates crime and corruption is not what the world needs. We should resist it。
