Web3 Innovators #72 - Web3 Perspectives: Backdoor CBDCs, Banks don't like USDC
In this Web3 Innovators: Insights podcast episode, we delve into the intriguing world of digital currencies and explore the concept of "Backdoor CBDCs." We discuss how certain stablecoins, like USDC, might inadvertently become collateralised by central bank reserves through intermediaries, sparking concerns among traditional banks. Additionally, we examine the potential of synthetic CBDCs and how they offer a unique approach to overcoming regulatory hurdles in the ever-evolving payment system landscape.
Key Discussion Points:
- Backdoor CBDCs - Unraveling the Mechanism:
- What distinguishes a backdoor CBDC from a synthetic CBDC?
- Understanding how a stablecoin like USDC might be collateralised by central bank reserves without direct involvement with the central bank.
- Insights into Blackrock's involvement and their use of the Federal Reserve's reverse repo facility (RRP).
- Synthetic CBDCs - A Novel Solution:
- Exploring the concept of synthetic CBDCs that are not issued by central banks but rely on a tokenised deposit system.
- Overcoming regulatory complexities in establishing blockchain-based payment systems.
- Examining the Bank of England's omnibus account and its implications on wholesale financial markets.
- USDC vs. Retail CBDCs - Assessing the Landscape:
- Understanding the characteristics of USDC as a retail crypto currency provided by Circle.
- Comparing retail CBDCs potentially issued by commercial banks on public blockchains, with a focus on J.P. Morgan and Citi dollars.
- Analysing issuer risk and the need for a robust regulatory framework to safeguard retail holders.
Join us in this exploration of the future of digital currencies and the potential implications for the financial ecosystem. We unravel the complexities of backdoor CBDCs, discuss the challenges of traditional banks, and envision the path ahead for retail digital currencies. Tune in to gain valuable insights and be part of the conversation on the rapidly evolving world of CBDCs and stablecoins.
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