Sunayna Tujeda has been named Chief Innovation Officer at the Federal Reserve (Fed), a new role in which she will lead efforts to identify, research and implement new technologies within the Fed. Tujeda, who joins as a Senior Vice President at the Fed, comes from online broker TD Ameritrade, where she served as head of Digital Assets. The appointment is effective February 22nd.
“Innovation is central to the Fed’s technology strategy, so I am very excited that Sunayna was willing to take this opportunity,” said Fed Chief Information Officer Ghada Ijam, adding that “she will collaborate with business and technology leaders to formulate an agenda that advances technology research and drives the great innovative work happening at the Fed.”
Sunayna Tujeda worked with emerging technologies among which she became familiar with Bitcoin, and was attracted to the use of blockchain technology. TD Ameritrade was among the first online brokers to allow Bitcoin transactions.
During herterm at TD Amertrade, Sunayna Tujeda led the dedicated cryptocurrency team. Her position built new crypto offerings, building blockchain and crypto partnerships. TD Ameritrade’s crypto offerings include Bitcoin futures through the CME Group. The broker, is also an investor in crypto exchange ErisX.
Tujeda has spoken about investing in Bitcoin and the rise of decentralized finance, both on organized panels and on her personal platforms. She once told Blockworks that she is a bitcoiner herself, and tweeted her admiration for the Bitcoin community in December 2020.
Fed is looking to stabilize the volatility of Bitcoin
“Clearly there is a need, and we’ve been very focused, as you know, on better regulatory responses for possible global stable currencies,” said Jerome Powell, Fed chairman, during a segment that focused in part on central bank digital currencies (CBDCs).
Most cryptocurrencies are designed to be a medium of exchange and not a store of value, but due to their early adoption, cryptocurrencies tend to be very volatile, so demand has arisen for more stable digital assets that avoid the high volatility of currencies like Bitcoin.
The Fed is studying a new cryptocurrency market known as “stablecoins” which is a monetary asset that is backed by other collateral, including fiat money, cryptocurrencies such as Bitcoin, or an algorithmic backing that determines the amount of tokens (money) in circulation in the market.
Stablecoins are still far from being adopted in the market, as they are not yet used as a means of payment, however, they are mainly used in cryptocurrency exchanges where traders can exchange their more volatile cryptos for stablecoins, and thus avoid being exposed to volatility. Stablecoins have become especially popular on cryptocurrency exchanges, where fiat money is not supported.
Stablecoins such as Tether are backed by the dollar, while others, such as DAI, are backed by cryptocurrencies such as Ethereum and finally cryptos, such as Basecoin, which use an algorithm to limit or expand the supply of cryptos in the market.
Powell has called the Fed’s work on stablecoins a “priority” and in a webinar said that, “it has been a high-level focus and will continue to be a high-level focus because (cryptocurrencies) could become systemically important overnight,” referring to the importance for the Fed to be able to have mechanisms in place to control systemic risk in cryptocurrency markets.
Undoubtedly, the entry of Sunayna Tujeda will help the FED to venture into this new market that seeks to correct a problem of a nascent market such as cryptocurrencies. The incorporation of a bitcoiner to the FED team sends a good signal to the cryptocurrency market and will surely accelerate its incorporation into the market.