1.a. (10 points) Stablecoins are designed to reduce the volatility of cryptocurrencies by being pegged to a reserve of assets that have low volatility or by an algorithm that maintains its value. Some have called for stablecoins to have access to some form of deposit insurance. Do you think this is a good idea? What problem would deposit insurance solve? 1.b. (10 points) During the Pecora hearings, a number of financial market abuses were uncovered. Do you see any parallels between the problems in the 1920s and the failure of FTX and cryptocurrency markets, more generally? (Please name a few.) Do you think that FTX's problems would have been mitigated if they had been regulated by the SEC? 1.c. (10 points) Proponents of a central bank digital currency (CBDC) argue that it would provide numerous benefits include a faster payments system, a cashless society, and access to the financial system for the unbanked. Christopher Waller, a Federal Reserve governor argues that developing a CBDC is not the least costly or most efficient means to overcome these problems and concludes that "CBDC remains a solution in search of a problem." Should the US develop a CBDC to solve these problems? Why