Economics Advisory
Ousmène Jacques Mandeng
Strategic consultancy at the intersection of fintech, public policy and monetary economics
Central bank digital currencies, tokenized deposits, tokenized money market fund shares, tokenized e-money, cryptocurrencies
Unique track record with work on key digital money projects
Focus on foreign exchange and cross-border payments
Projects
On the adoption of digital monies
UBS published an interview of mine on the barriers to the adoption of digital monies. While the U.S. has undoubtedly given a big push to digital monies, USDC in circulation is up by about 10 percent since early July, it does not yet quite feel like the big digital money rally is just around the corner. Potential obstacles to adoption are many. Doubts about the utility of digital monies remain.
On the economics of cryptoasset regulation
I participated in the UK’s Financial Conduct Authority (FCA) Cryptoasset Forum on Wednesday in London with the participation of a wide range of financial supervisors. The ask was to contemplate what regulators should do more to ensure effective regulation of cryptoassets and what possible new or emerging risks have not yet been covered by regulation. I kicked off my remarks by asking what is different about cryptoassets but in particular what is not.
Stablecoins and foreign exchange settlement
This is to share that I had the honour to participate in a discussion on stablecoins in Singapore for the Global Foreign Exchange Committee (GFXC), issuer of the FX Global Code, a set of global principles of good practice in the foreign exchange market.[...] We discussed if stablecoins could assume the role of settlement instrument for the foreign exchange market and whether stablecoins put further pressure on central banks to develop CBDCs.
CBDC versus stablecoins (season 2)
This is to share that on Wednesday, I had the immense pleasure to keynote and join a panel chaired by Massimiliano Castelli at the UBS Reserve Manager Seminar [in Wolfsberg (Switzerland)], one of the biggest central bank gatherings, on the topic of CBDC versus stablecoins. The comparison seems evident amid the division of labour between central bank and other monies but actually it depends on certain conditions (I may need to amend my earlier views).
Digital monies: What's new?
On Thursday, I had the pleasure of speaking on a fantastic panel on digital money at the Global Blockchain Business Council (GBBC) conference in Washington, D.C.
Recent commentary
Stablecoins are not the future of international payments
Once the preserve of the crypto community, stablecoins in recent years have been touted as a means of disrupting the global payments infrastructure, not least within areas such as cross-border transactions and foreign exchange settlement. Yet while stablecoins exhibit properties that lend themselves to settlement, a better option for cross-border payments has emerged in the form of tokenised money market funds.
Do stablecoins increase the net demand for US Treasury securities?
Stablecoins are being advertised as increasing the demand for high-quality assets. Some even suggest they may solve governments' debt problems by producing an increased demand for Treasury securities. US Treasury Secretary Scott Bessent said: "A thriving stablecoin ecosystem will drive demand from the private sector for US Treasuries, which back stablecoins. This newfound demand could lower government borrowing costs and help rein in the national debt."
This view rests on the strong assumption that stablecoins can increase the net demand for Treasury securities. While this is possible, it is not assured, and under some conditions net demand could be unchanged or even lower.
A central bank digital currency can shape the national payment system
Central banks are exploring the idea of issuing a digital banknote or retail central bank digital currency (CBDC). Today, they offer only physical banknotes to the general public.
With increasing digitalisation in payments and already dominant use of digital means, it seems obvious that central banks should follow suit. Yet, many remain hesitant amid the availability of a broad range of alternative, typically bank-based, digital payment tools. Andrew Bailey, Governor of the Bank of England recently questioned the need for a retail CBDC if banks can offer a good alternative. The question therefore is, is a retail CBDC needed? The answer depends on how central banks see their role. [...]
Stablecoins thrive on regulation but is that enough?
Stablecoins have brought national-currency denominated monies onto blockchain. Not only is this highly commendable, it also crucially exposes the slowness of traditional money issuers in adopting new technologies. Recent regulatory advances, however, now seem to bestow stablecoins with specific advantages that may drive money fragmentation and arbitrage, create new compliance risks and distort fair competition. [...]
On the foreign exchange dimension of cross-border payments
[...] the new U.S. administration has engineered de facto a system reset. Its policy stance seems geared towards undermining the very foundations of the unique international role of the dollar. It seems that the quest for an alternative model is now far more urgent as it has become apparent that relying on a single currency may be just too risky. As there is no other currency that can supplant the dollar, nor would it be desirable, the alternative will likely be a greater currency diversification.[...]
Currency Wars in the Digital Age: CBDCs, Stablecoins and Mr Trump
[...] During the IMF Spring Meetings in April, IMF Chief Economist Pierre-Olivier Gourinchas stressed that the “global economic system that has been operating for the last 80 years has been reset.” In this seminar, I will try to offer you a new perspective on the international monetary dimension of the system reset. There is a new type of currency war looming which is about shifting the relative attractiveness of currencies in international payments. I will provide a brief overview of what the system is about and then focus on how digital monies may change it and why. The innovation with digital monies is not how payments are being made but how they are being processed and how thereby they may change the incentives for holding currencies.[...]
If the US dollar's dominance fades, here's what might replace it
Predictions about the demise of the U.S. dollar as the main international currency seem to be gaining momentum amid the recent drastic and unpredictable economic policy measures of the U.S. administration on tariffs. Credible paths toward an orderly regime change remain rare. Projects like mBridge with the participation of the central banks of China, Hong Kong, Saudi Arabia, Thailand and the United Arab Emirates promote greater currency diversification in international payments. Recent events may have made such projects even more relevant. [...]
More commentary
Services
Strategic advice
Consultation on monetary innovation, central bank digital currencies (CBDC), private digital monies and other blockchain-based financial and payments applications with a focus on cross-border payments and securities settlement.
Speaking
Event and keynote addresses and panel discussions on digital monies and assets and international monetary affairs.
Publications
Two key publications by the Reinventing Bretton Woods Committeeon international monetary affairs are now available on Amazon:
About
Economics Advisory Ltd. is a London-based private limited company registered in England and Wales established in 2018 with a special focus on tokenised money and payments solutions led by Ousmène Jacques Mandeng.
Dr Ousmène Jacques Mandeng specialises in the economics of tokenised monies, their impact on financial markets and the digital transformation of finance. He is acting as Senior Advisor to Accenture on major tokenised money projects and in particular central bank digital currencies. Ousmène had worked more than 20 years in senior positions in financial markets and the International Monetary Fund. He comments regularly on the impact of digital money and the international monetary system. Ousmène is a Visiting Fellow of the London School of Economics and Political Science, Member of the Bretton Woods Committee, Fellow of Reinventing Bretton Woods Commitee, Member of Robert Triffin International. He is fluent in German, English, French and Spanish and holds a PhD from the LSE.
All views expressed in this blog are those of Economics Advisory and not necessarily those of its clients.