NZ Governor Opposes Stablecoins, Not Legal Tender Replacement: Report

Key Points:

• Adrian Orr, the Governor of the New Zealand central bank, expressed concern about cryptocurrencies, particularly stablecoins, and their potential to disrupt the global financial system.
• He emphasized that Bitcoin and other digital currencies are not substitutes for fiat currency and that their value is not as stable as they claim to be.

NZ Governor Opposes Stablecoins, warns they aren’t a fiat substitute, are unstable, and could threaten the financial system, as per Bloomberg.

Adrian Orr, the Governor of the New Zealand central bank, has voiced his critical concerns about cryptocurrencies, especially stablecoins. He warned that these digital assets are not a viable replacement for fiat currency.

Cryptocurrency Debate Heats Up: NZ Governor Opposes Stablecoins as Money 

Orr described stablecoins as “the biggest misnomers” and “oxymorons,” emphasizing their instability and reliance on the balance sheet of the entity issuing them.

These crypto tokens, although pegged to another asset and supported by large reserves, can be affected by turmoil in the traditional financial world, thereby potentially affecting real-world markets.

Orr also expressed concern that independent digital currencies might pose a threat to the global financial system. He stated that these digital currencies often fail to deliver what they promise as alternatives to central bank cash.

Readmore: Bitcoin vs. Fiat: Lummis Sees Crypto As “Superior” Money Of The Future

Orr’s Clarification on Bitcoin’s Role and the Importance of Fiat Currencies

The Governor also clarified that Bitcoin, despite its popularity, is neither a means of exchange, a store of value, nor a unit of account. He asserted that Bitcoin is not a substitute or even a complement to central bank money.

Lastly, he stated that fiat currencies, such as the New Zealand dollar, exist due to the backing of parliament and the existence of credible institutions like independent central banks that uphold low and stable inflation.