Simon Gleeson

Give us the money: how to bank Central Bank Digital Currencies and stablecoins

Banks and other payment service providers have a number of legal options in the way in which they structure the services which they provide to customers in respect of Central Bank Digital Currencies (CBDCs) and stablecoins. These do not differ between privately originated or central-bank originated coins. However, product providers are unlikely to wish to create apparently similar products with different fee structures. We therefore expect an industry consensus to develop fairly rapidly around a particular legal structure that applies to both stablecoins and CBDCs. It remains to be seen whether this will be a bailment-based (e-wallet) structure or a deposit-based (debtor-creditor) structure.