Travel well, Mr Greenspan

Daily insights on the decisions, signals and risks shaping central bank policy across the world’s major economies.

US Fed

Alan Greenspan at a board meeting. October 2000.

June 22, 2026 at 4:11 PM IST

The Federal Reserve marked the passing of Alan Greenspan, who served as chair from 1987 to 2006 and guided the institution through prolonged expansion as well as periods of financial stress. The Fed highlighted Greenspan’s role in establishing price stability and strengthening confidence in the institution.

Greenspan brought rigorous analytical discipline to monetary policymaking and helped establish the credibility that remains one of the Federal Reserve's most important assets, the Fed said.

“Chairman Greenspan's legacy endures at the Federal Reserve—in those he mentored directly, in the economists and public servants he inspired, and in the frameworks and practices he helped shape.”

The Big Picture

The most consequential central banking decision today did not involve an interest rate.

The Bank of England has set out draft rules for systemic sterling stablecoins. It has abandoned proposed holding limits for households and businesses, replacing them with an initial £40 billion issuance ceiling for each systemic stablecoin. Issuers will be permitted to hold 70% of backing assets in short-term UK government debt and the remaining 30% as unremunerated deposits at the BOE.

That may look like a technical compromise between regulators and the digital asset industry. The BOE is deciding who may create a private claim that functions like money, what must stand behind that claim, how much may circulate and where liquidity will come from during stress.

It is, in effect, a constitution for private money.

The broader central banking calendar makes the timing significant. The Federal Reserve opens a two-day conference today on the international role of the dollar. Its agenda begins with stablecoins and digital payments before moving to competing cross-border payment rails, spillover effects and the future of the dollar’s global role. The ECB, meanwhile, is placing the international role of the euro and the need for digital public money at the centre of its own strategic debate.

For much of the past four decades, central banking appeared to revolve around the price of money. Set the policy rate, influence financial conditions and allow commercial banks to create and distribute most of the money used by households and businesses.

Stablecoins reopen that arrangement.

The emerging question is no longer merely what money should cost. It is who may issue it, which assets must back it, and who earns the return on those assets.

Today’s Board

Threadneedle Street: A Monetary Franchise, Not a Crypto Licence

The BOE’s revised framework shifts regulatory control from stablecoin users to issuers. It has dropped proposed holding limits for individuals and businesses and will instead cap each systemic sterling stablecoin at £40 billion of total issuance. That avoids the practical difficulty of tracking one user’s holdings across multiple wallets while giving the central bank direct control over the quantity of private digital sterling in circulation.

Issuers will be required to hold 70% of their backing assets in short-term government securities and 30% as unremunerated deposits at the BOE. They must maintain redemption at par, hold capital and liquidity buffers and prepare for an orderly failure. The BOE also plans a facility allowing eligible issuers to borrow against government debt during exceptional stress.

This is not merely a crypto-licensing regime. It is a controlled monetary franchise: private firms may issue the token and manage the customer interface, but the public sector determines the reserve assets, liquidity access and maximum scale.

Constitution Avenue: Dollar Power Without a Digital Dollar

The Federal Reserve’s conference agenda reveals why stablecoins are no longer a niche regulatory issue.

The opening sessions cover the basic economics of stablecoins, competition among banks, financial technology companies and stablecoins in cross-border payments, the structure of blockchain currency markets and the spillovers created by stablecoin adoption. The final panel asks how digital assets could influence the dollar’s international role and the wider monetary architecture.

The dollar may not require a retail central bank digital currency to extend its influence through digital finance. Private dollar tokens can carry the dollar’s unit of account, US government securities and dollar redemption into new payment and settlement systems.

Reserve currency power was traditionally measured through central bank reserves, trade invoicing, international borrowing and foreign exchange turnover. Those measures remain important. But currency influence will increasingly depend on whether a currency can move cheaply across platforms, settle tokenised assets, operate continuously and remain redeemable during stress.

The currency of the digital economy may therefore be the one with the most trusted combination of software, liquidity and sovereign assets.

That gives the US a structural advantage. Deep Treasury markets provide the reserve asset. Dollar liquidity provides the anchor. Private issuers can build the distribution layer.

The Federal Reserve does not need to manufacture every digital dollar itself. It needs to determine which private dollar claims are safe enough to travel as money.

Beijing: The Price Of Credit is Not the Whole Problem

China provided a useful contrast today by leaving its benchmark lending rates unchanged for a thirteenth consecutive month. The one-year loan prime rate remains at 3.00%, while the five-year rate remains at 3.50%.

The decision is a reminder that monetary transmission can weaken long before digital money becomes relevant.

When households and companies are reluctant to borrow, lowering the quoted lending rate does not automatically increase credit demand. The constraint lies not only in the price of money, but in confidence, expected income, property values and the willingness to take risk.

London, Washington and Frankfurt are debating the future architecture of money. Beijing is confronting a more traditional problem: ample liquidity does not ensure that someone wants to borrow it.

Both lessons matter. Better payment rails can move money more efficiently. They cannot create productive demand for credit.

Policy Themes

Private Money Becomes Public Infrastructure

Once a stablecoin becomes systemic, it can no longer be treated as a technology product with a financial wrapper. It requires official reserve rules, redemption standards, capital, failure arrangements and access to emergency liquidity. The distinction between a financial technology company and a monetary institution begins to disappear.

Date	Institution/Event	Key Focus
Jun 23	Magyar Nemzeti Bank	Rate decision alongside a new Inflation Report. The forecasts will show whether lower inflation creates room for easing or whether external volatility still requires patience.
Jun 24	Bank of Thailand	Weak domestic demand argues for support, while energy prices and imported inflation limit the scope for further easing.
Jun 24	BOJ Summary of Opinions	Markets will assess how broadly policymakers supported the June increase to 1% and whether another hike could arrive before October.
Jun 24	Bank of Canada deliberations	The account should reveal how seriously policymakers considered tightening and how they assessed the risk of energy costs spreading into broader inflation.
Jun 25	Banco de México	The focus will be on whether Banxico pauses its easing cycle as core inflation and external rate pressures remain elevated.
Jun 25	US PCE inflation	The Fed’s preferred inflation measure will provide the first significant test of the FOMC’s newly hawkish policy bias.

Mint Street Notes

The RBI’s latest Bulletin treats the interim US-Iran peace agreement as a respite rather than a resolution. It warns that any breakdown could revive inflation expectations, disrupt energy infrastructure, delay investment, worsen food-security risks and weaken financial stability. For India, the main transmission channels would be commodity prices, input costs, trade and capital flows.

The RBI also stresses that India had entered this period with stronger buffers: sustained growth, anchored inflation expectations, fiscal consolidation, a manageable current-account position and adequate foreign-exchange reserves. But resilience is not immunity. A deficient southwest monsoon could compound the external shock and worsen the domestic growth-inflation trade-off.

In MPC minutes, external member Saugata Bhattacharya’s concern is not merely the first-round rise in energy costs but whether it produces second-order pass-through into retail inflation and expectations. The MPC holding of rate, therefore, rests on India’s buffers, not on the assumption that the risks have disappeared.

The Signal

The next era of central banking will be less visible than an interest rate decision.

It will be embedded in rules governing reserve assets, redemption rights, issuance ceilings, settlement accounts and emergency liquidity. Those technical choices will determine who may create money, who earns the income generated by its reserves, which institutions retain deposits and which currencies expand their international reach.