Daily Archive: September 22, 2020

Feds’ ‘stablecoin’ letter may boost crypto ambitions of Facebook, Square

The federal agency that oversees banks issued a letter on Monday that gives financial institutions a green light to hold reserves to support so-called stablecoins—digital currencies similar to Bitcoin that are backed on a one-to-one basis by real world money.

While stablecoins have existed for years, their popularity has soared in recent months both in cryptocurrency circles, and among businesses that have embraced them as an efficient way to settle international transactions.

In its letter, the Office of the Comptroller of the Currency (OCC) stated that U.S. banks can lawfully hold the fiat currency reserves of companies that issue stablecoins, provided those firms comply with federal banking laws.

According to Jeremy Allaire, the CEO of cryptocurrency firm Circle—which has issued a stablecoin called USDC alongside crypto giant Coinbase—the letter will provide legal cover for tech and finance companies that are experimenting with stablecoins.

Allaire pointed in particular to … Read More

ECB should err in doing too much rather than too little: Panetta By Reuters

© Reuters. Mario Draghi receives the Order of Merit of the Federal Republic of Germany in Berlin

FRANKFURT (Reuters) – The European Central Bank should err on the side of providing too much stimulus rather than too little, given the grave risks facing the euro zone economy, ECB board member Fabio Panetta said on Tuesday.

“Faced with such a sizeable downward skew, there is a strong case for our reaction function to be asymmetric, as the risks of a policy overreaction are much smaller than the risks of policy being too slow or too shy to react and the worst-case scenarios materialising,” Panetta said in a speech.

Panetta also singled out the recent appreciation of the euro as an “undesirable” factor weighing on inflation.

“The sustained appreciation in the external value of the euro has brought about an undesirable tightening of financial conditions and has offset some of the monetary

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