Stablecoins Are Chastised By The Bank of England For Being “unstable.”
Stablecoins have been criticized by a high-ranking BoE executive, who claims they are unsuitable for investors.
According to Bloomberg, a Bank of England (BoE) official has criticized stablecoins, claiming that they are unstable, referring to UST and USDT in particular.
Andrew Hauser, the Bank of England’s executive director for markets, recently discussed what stablecoins like UST and Tether’s USDT lack and why they are inappropriate for widespread consumer use.
This is what he said today during a panel discussion hosted by the Federal Reserve of New York.
He claims that the UST and USDT do not disclose adequate real-time data on their worth or details on how they maintain fiat convertibility.
“They are not stable,” he said, adding that holders of these digital assets should be aware that they may incur significant financial losses as a result of these cryptocurrencies.
“Holders of such coins must accept at least the possibility of finding themselves badly out of pocket.”
The Bank of England supports a plan to increase regulation of cryptocurrencies in the United Kingdom because it sees digital assets as a growing threat to the global financial system. The cryptocurrency industry is now worth $1.7 trillion, more than the subprime mortgage market was worth when it crashed in 2008.
According to Hauser, regulators will pay special attention to stablecoins, which are becoming more widely used, and the recent collapse of TerraUST and variations in the USDT peg suggest that this sort of digital asset may require more stringent oversight. He explained:
“Buyer beware warnings may be sufficient for coins that are only in niche use, but they cannot be enough for any that reach systemic scale.”
Issuers may be required to back their stablecoins with actual deposits at the Bank of England under the new guidelines that the BoE proposes to implement. He also stated that if central banks begin minting CBDCs (central bank digital currencies) for retail investors, it will certainly cause balance sheet issues for banks.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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Stablecoins Are Chastised By The Bank of England For Being “unstable.”
Stablecoins have been criticized by a high-ranking BoE executive, who claims they are unsuitable for investors.
According to Bloomberg, a Bank of England (BoE) official has criticized stablecoins, claiming that they are unstable, referring to UST and USDT in particular.
Andrew Hauser, the Bank of England’s executive director for markets, recently discussed what stablecoins like UST and Tether’s USDT lack and why they are inappropriate for widespread consumer use.
This is what he said today during a panel discussion hosted by the Federal Reserve of New York.
He claims that the UST and USDT do not disclose adequate real-time data on their worth or details on how they maintain fiat convertibility.
“They are not stable,” he said, adding that holders of these digital assets should be aware that they may incur significant financial losses as a result of these cryptocurrencies.
“Holders of such coins must accept at least the possibility of finding themselves badly out of pocket.”
The Bank of England supports a plan to increase regulation of cryptocurrencies in the United Kingdom because it sees digital assets as a growing threat to the global financial system. The cryptocurrency industry is now worth $1.7 trillion, more than the subprime mortgage market was worth when it crashed in 2008.
According to Hauser, regulators will pay special attention to stablecoins, which are becoming more widely used, and the recent collapse of TerraUST and variations in the USDT peg suggest that this sort of digital asset may require more stringent oversight. He explained:
“Buyer beware warnings may be sufficient for coins that are only in niche use, but they cannot be enough for any that reach systemic scale.”
Issuers may be required to back their stablecoins with actual deposits at the Bank of England under the new guidelines that the BoE proposes to implement. He also stated that if central banks begin minting CBDCs (central bank digital currencies) for retail investors, it will certainly cause balance sheet issues for banks.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
Join CoinCu Telegram to keep track of news: https://t.me/coincunews
Follow CoinCu Youtube Channel | Follow CoinCu Facebook page
Patrick
CoinCu News
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