Gu Yanxi: A brief analysis of the impact of the new regulations of the U.S. Bureau of the Comptroller of the Currency on global digital stablecoins
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impact on the dollar
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Impact on Libra
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Impact on other stablecoins
I believe that the central banks of various countries have a clear judgment on the impact of this new OCC regulation. In order to ensure the influence of its legal currency in global financial and economic activities, it will take more active measures to promote the development of its own digital currency. There are two measures in this regard, one is to accelerate the promotion of its own CBDC, and the other is to adopt this measure of the OCC, which allows private institutions to issue digital stable coins on the basis of their own legal tender. Or a combination of both measures.
In my opinion, the underlying infrastructure supporting the circulation of stablecoins is more important than stablecoins. So I always think that Libra's digital stable currency is more like a Trojan horse, and the biggest threat to the existing financial market is its underlying blockchain. If Libra's underlying blockchain is used globally, the value of a certain stablecoin circulating on it will be greatly weakened. Due to the high liquidity of the digital currency supported on this chain, there is a very high liquidity between digital currency and digital currency, and between digital currency and digital assets, which can realize convenient exchange at any time. The main function of digital currency is therefore a settlement tool, and its value storage function will be reduced. When users make payments on the chain, as long as there is an acceptable and usable value unit of measurement, the transaction needs can be met. Users can exchange the digital currency in their hands for other digital currencies or digital assets that he thinks are more needed or valuable at any time.
Therefore, for other digital stablecoins, the underlying blockchain used and the institutions and users that can be attracted on this chain determine the market competitiveness of digital stablecoins issued on this chain. There can be one or more digital stablecoins in circulation on this chain. Since the Libra digital dollar stable currency is circulated on its own underlying blockchain, the Libra digital dollar stable currency cannot compete with such a digital stable currency. In this sense, I don’t think the OCC’s new regulations will have much impact on stablecoins that may compete with Libra in Southeast Asia (see my related article).
