The CEO and president of the Federal Reserve Bank of New York, John Williams, recently spoke to a group of scholars, officials and leaders of the financial industry. According to Williams, the world is ready to undergo a change which will fundamentally alter the way you work with money.
This new insight comes as a part of the speech Williams delivered at a workshop regarding the implementation of monetary policy. The invitation-only workshop was co-hosted by the Columbia University and the New York Fed.
Backing of Liquid Assets Important for Safety
NY’s Federal Reserve Bank president does not believe that stablecoins are outright dangerous. According to other statements by John Williams, all cryptocurrencies do not have a non-digital asset backing. He further emphasized that stablecoins and CBDC (Central Bank Digital Currencies) with a liquid asset backing have the biggest potential for innovation.
Overnight Reverse Repurchase and Effects of Technology
Mr. Williams emphasized the importance of keeping up with new developments. The president of the NY central bank did not comment much on the potential future impact of crypto assets. Instead, Williams remarked on the effects of the 2014 ON RPP (Overnight Reverse Repurchase) agreements. ON RPP agreements worth 2$ trillion are currently maintained. Undoubtedly, they have changed the Fed’s balance sheet structure.
Despite all the technological advancements, Williams reiterates that the role of the Central Bank will remain unchanged. Williams urged the Central Bank officials to remain focused on meeting our their responsibilities. Officials need to do this while staying up to date with the recent technological advancements.