Accueil
Envoyer
Imprimer
Partager
The Boston-based firm, which survived the collapse of Silicon Valley Bank (SVB) by shifting $3.3 billion of cash out of the struggling bank, told a Gillmore Centre for Financial Technology conference that it has long advocated for regulation that would make it a full reserve federally supervised institution.
At the conference held at Warwick Business School, Circle’ s Tarleton Watkins said that one long term option for retail stablecoins could involve a wholesale central bank digital currency (CBDC) at the Fed as a backing instrument, but in the meantime holding dollar reserves with the Fed rather than various financial partners would be a logical step in light of SVB’s failure.
The Senior Policy Specialist said: “In some ways, the events surrounding SVB act as a vindication of what we have been advocating for and that is a full Fed reserve model, where we could have access to risk-free cash.
“Although it is rare to have cascading bank failures, like in the financial crisis of 2008, this event with SVB put Circle through a very serious stress test, and we have come through it.
“This shows the resiliency of our business model and operational model. It also provides an excellent learning lesson and prepares us for the next steps as to where regulation should go.”
Circle’s USDC is backed equally by U.S. dollars on a one-to-one basis, with its dollars divided into 80 per cent of U.S. Treasury bills and 20 per cent cash. And it provides a monthly update on the reserves it is holding to peg Circle’s stablecoin at $1.
Indeed, Circle has been advocating for more regulation of stablecoins to give investors confidence and security.
Mr Watkins added: “Regulatory clarity for novel financial products and services like USDC can provide greater incentive for traditional financial institutions to incorporate digital assets onto their balance sheet.
“Digital currencies should be fully reserved with high quality liquid assets, i.e. cash and short duration government obligations.
“They should also be prudentially regulated and supervised by federal or national regulators at the central bank level or equivalent. Digital currency issuers should have direct access to accounts at the central bank.”
In a talk on CBDCs and stablecoins at the conference Ganesh Viswanath Natraj, Assistant Professor of Finance at the Gillmore Centre for Financial Technology, supported the idea of central banks and stablecoin providers working closer together.
He said: “If stablecoins can be backed by digital pounds or dollars held entirely with a central bank, the central bank could then regularly audit stablecoin providers’ reserves and impose capital requirements.
“If issuers were holding a certain percentage of liquid digital currency reserves at the central bank, this would ensure they had funds to process redemptions. The central bank could also provide insurance for customers and having its backing would reduce the risk of a run on the stablecoin.”
The conference also saw talks on DeFi and centralised finance from Anastasia Melanchrinos, of cryptocurrency market data firm Kaiko, on crypto derivatives by founder of analytics platform Block Scholes Eammon Gashier, and the growing metaverse industry by Nick Merritt, of metaverse platform Vault Hill,
While Amit Chaudhary, of DeFi app builder Polygon, revealed research on DeFi liquidations, and Cynthia Campbell, of Canada’s Alberta Securities Commission, and Amila Dissanayake, of crypto analysis firm Chainalysis, detailed the problem of fraud and scams in the crypto industry.
Ram Gopal, Academic Director for the Gillmore Centre of Financial Technology, which aims to become a global centre for excellence for fintech research and was established by Warwick Business School using a £3 million donation from Clive Gillmore, founder and Group CEO of Mondrian Investment Partners, said: “The conference showed the innovation and ingenuity at the heart of fintech and digital currencies, and how academic research centres like ours can play a vital role in this exciting sector.
“The Gillmore Centre will be at the heart of this new world, creating a place for researchers, policymakers, industry leaders and tech entrepreneurs to come together and explore new opportunities and ideas.”
Gillmore Centre for Financial Technology's primary mission is to conduct world-class, cutting-edge research at the intersection of finance and technology. The Centre, established and run out of Warwick Business School, engages in research exploring the transformative impact of emerging technologies like artificial intelligence, machine learning, blockchain, mobile payments, cryptocurrencies and crowdfunding platforms on financial activities. The Centre was set up thanks to a £3 million donation from Warwick Business School alumnus Glive Gillmore, Group CEO and founder of Mondrian Investment Partners.
Warwick Business School, located in central England, is the largest department of the University of Warwick and ranked in the world’s top one per cent business schools by the Financial Times. WBS is triple-accredited by the leading global business education associations and was the first in the UK to attain this accreditation. Offering the full portfolio of business education courses, from undergraduate through to MBAs, and with a strong Doctoral Programme, WBS is the complete business school. Students at WBS currently number around 6,500, and come from 125 countries. Just under half of faculty are non-UK, or have worked abroad.
At the conference held at Warwick Business School, Circle’ s Tarleton Watkins said that one long term option for retail stablecoins could involve a wholesale central bank digital currency (CBDC) at the Fed as a backing instrument, but in the meantime holding dollar reserves with the Fed rather than various financial partners would be a logical step in light of SVB’s failure.
The Senior Policy Specialist said: “In some ways, the events surrounding SVB act as a vindication of what we have been advocating for and that is a full Fed reserve model, where we could have access to risk-free cash.
“Although it is rare to have cascading bank failures, like in the financial crisis of 2008, this event with SVB put Circle through a very serious stress test, and we have come through it.
“This shows the resiliency of our business model and operational model. It also provides an excellent learning lesson and prepares us for the next steps as to where regulation should go.”
Circle’s USDC is backed equally by U.S. dollars on a one-to-one basis, with its dollars divided into 80 per cent of U.S. Treasury bills and 20 per cent cash. And it provides a monthly update on the reserves it is holding to peg Circle’s stablecoin at $1.
Indeed, Circle has been advocating for more regulation of stablecoins to give investors confidence and security.
Mr Watkins added: “Regulatory clarity for novel financial products and services like USDC can provide greater incentive for traditional financial institutions to incorporate digital assets onto their balance sheet.
“Digital currencies should be fully reserved with high quality liquid assets, i.e. cash and short duration government obligations.
“They should also be prudentially regulated and supervised by federal or national regulators at the central bank level or equivalent. Digital currency issuers should have direct access to accounts at the central bank.”
In a talk on CBDCs and stablecoins at the conference Ganesh Viswanath Natraj, Assistant Professor of Finance at the Gillmore Centre for Financial Technology, supported the idea of central banks and stablecoin providers working closer together.
He said: “If stablecoins can be backed by digital pounds or dollars held entirely with a central bank, the central bank could then regularly audit stablecoin providers’ reserves and impose capital requirements.
“If issuers were holding a certain percentage of liquid digital currency reserves at the central bank, this would ensure they had funds to process redemptions. The central bank could also provide insurance for customers and having its backing would reduce the risk of a run on the stablecoin.”
The conference also saw talks on DeFi and centralised finance from Anastasia Melanchrinos, of cryptocurrency market data firm Kaiko, on crypto derivatives by founder of analytics platform Block Scholes Eammon Gashier, and the growing metaverse industry by Nick Merritt, of metaverse platform Vault Hill,
While Amit Chaudhary, of DeFi app builder Polygon, revealed research on DeFi liquidations, and Cynthia Campbell, of Canada’s Alberta Securities Commission, and Amila Dissanayake, of crypto analysis firm Chainalysis, detailed the problem of fraud and scams in the crypto industry.
Ram Gopal, Academic Director for the Gillmore Centre of Financial Technology, which aims to become a global centre for excellence for fintech research and was established by Warwick Business School using a £3 million donation from Clive Gillmore, founder and Group CEO of Mondrian Investment Partners, said: “The conference showed the innovation and ingenuity at the heart of fintech and digital currencies, and how academic research centres like ours can play a vital role in this exciting sector.
“The Gillmore Centre will be at the heart of this new world, creating a place for researchers, policymakers, industry leaders and tech entrepreneurs to come together and explore new opportunities and ideas.”
Gillmore Centre for Financial Technology's primary mission is to conduct world-class, cutting-edge research at the intersection of finance and technology. The Centre, established and run out of Warwick Business School, engages in research exploring the transformative impact of emerging technologies like artificial intelligence, machine learning, blockchain, mobile payments, cryptocurrencies and crowdfunding platforms on financial activities. The Centre was set up thanks to a £3 million donation from Warwick Business School alumnus Glive Gillmore, Group CEO and founder of Mondrian Investment Partners.
Warwick Business School, located in central England, is the largest department of the University of Warwick and ranked in the world’s top one per cent business schools by the Financial Times. WBS is triple-accredited by the leading global business education associations and was the first in the UK to attain this accreditation. Offering the full portfolio of business education courses, from undergraduate through to MBAs, and with a strong Doctoral Programme, WBS is the complete business school. Students at WBS currently number around 6,500, and come from 125 countries. Just under half of faculty are non-UK, or have worked abroad.
------------------------------------------------------------------------
Disclaimer: The text above is a press release that was not written by Finyear.com.
The issuer is solely responsible for the content of this announcement.
Avertissement : Le texte ci-dessus est un communiqué de presse qui n'a pas été rédigé par Finyear.com.
L'émetteur est seul responsable du contenu de cette annonce.
-------------------------------------------------------------------------
Les avis financiers et/ou économiques présentés par les contributeurs de Finyear.com (experts, avocats, observateurs, bloggers, etc...) sont les leurs et peuvent évoluer sans qu’il soit nécessaire de faire une mise à jour des contenus. Les articles présentés ne constituent en rien une invitation à réaliser un quelconque investissement.
The financial and/or economic opinions presented by Finyear.com contributors (experts, lawyers, observers, bloggers, etc.) are their own and may change without the need to update the content. The articles presented do not constitute an invitation to make any investment.
Disclaimer: The text above is a press release that was not written by Finyear.com.
The issuer is solely responsible for the content of this announcement.
Avertissement : Le texte ci-dessus est un communiqué de presse qui n'a pas été rédigé par Finyear.com.
L'émetteur est seul responsable du contenu de cette annonce.
-------------------------------------------------------------------------
Les avis financiers et/ou économiques présentés par les contributeurs de Finyear.com (experts, avocats, observateurs, bloggers, etc...) sont les leurs et peuvent évoluer sans qu’il soit nécessaire de faire une mise à jour des contenus. Les articles présentés ne constituent en rien une invitation à réaliser un quelconque investissement.
The financial and/or economic opinions presented by Finyear.com contributors (experts, lawyers, observers, bloggers, etc.) are their own and may change without the need to update the content. The articles presented do not constitute an invitation to make any investment.
