Fiat Freeway: GMO’s JPY-pegged Stablecoin Rises in the Big Apple and Fed Researchers Weigh-in on Digital Asset Tokens vs. Accounts

Quick Take

  • ‘Fiat Freeway’ is a weekly column providing the latest updates on central bank digital currencies (CBDCs) and stablecoins.
  • This week’s column first examines Trust Company Inc.’s trust charter approval from the New York State Department of Financial Services (NYDFS).
  • We conclude with a review of a recent FEDS Note on the tokens vs. accounts classification of digital assets, particularly CBDCs.
Chart embedded from The Block Crypto Data.
  • The concept of a “digital object” form of money (i.e., coin, object, or bearer instrument) stored in a wallet or locally on someone’s machine raises significant questions regarding technological feasibility, safety, and security.
  • Calling systems that feature true local and blockchain-based systems “token-based,” obscures the diverse technological underpinnings of each form of electronic recordkeeping.
  • Since digital tokens are fundamentally just pieces of information in both cryptocurrency and central banking, people may not only be referring to physical assets when discussing tokenization.
  • There can often be confusion between the communities around what exactly a token represents.
  • Today, many CBDC reports focus on either conceptual, policy topics or technical issues.
  • The intersection of analytical concepts and technical implementation is necessary to avoid further confusion over what a token is, what can it do, how it can support a digital currency, and what it means in the context of a CBDC.
  • As jurisdictions consider legal frameworks and oversight regimes around the issuance and use of digital currencies, the need for clear use of words and clear definitions becomes even more important.



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Building Financial-Grade Digital Assets. The World’s First Regulated JPY-Pegged Stablecoin Issuer.