Andrew Bailey, the Governor of the Bank of England is all skeptical towards stablecoins’ security to become a regulated form of money. He suggested that CBDC meet that requirement and be used for monetary purposes rather than independent trading on cryptocurrency exchanges like Coinbase Pro or GDAX which would lead them away from being considered “real” currencies by governments around Europe as well as North America.
The Central banks have been wary about crypto because it’s volatile but what does this mean? It just goes boils down to one thing – how much control do we need over something so decentralized anyway?! The answer seems pretty clear: not very much at all! These days if you want cash in your pocket then go find yourself some quarters–I’m going out tonight.
For a currency to be viable, it must have stability. However, stablecoins do not provide enough of this for the economy in future digital payments according to Reuters’ words before House of Lords’ Economic Affairs Committee member Bailey’s opinion on cryptocurrencies and their impact.
Commenting on the same, BoE’s Governor said, “Is it going to evolve to some world of (asset-) backed stablecoins which has money-like features which could be regulated? I must say I am skeptical about that. Or, is the better contribution, particularly to financial stability, to say the better alternative to that may be a central bank currency of digital form?”
Tech giants like Facebook, for instance, have sparked concerns that stablecoins can be considered a secure means of payment or money. This is because the company announced they are developing their own cryptocurrency, Libra Bloomberg reports Facebook CEO Mark Zuckerberg said at the f8 developer conference in California. He also revealed details about what this new form would look like including how it will work with other apps integrated into your social media experience-allowing you to get paid without giving up personal information while still maintaining total control over transactions.
The world is changing, and so are the ways in which we store value. The use cases for these new innovations—such as cryptocurrencies or stablecoins—are only beginning to unfold with time but will undoubtedly have a significant impact on society moving forward because they provide individuals with more options when it comes to investing their money safely while also facilitating financial transactions between two parties without third party interference
Social media influencers who invest large sums of cash into cryptocurrency gain instant exposure through thousands upon millions views per post. This not just helps them monetize content that otherwise wouldn’t earn revenue off ads alone.
The idea of a stablecoin might not seem like the most exciting thing in this world, but it has been gaining popularity because lawmakers are concerned with privacy matters and financial stability factors.
Bailey states, “We do not see this as the Bank of England moving into the retail bank account business through a central bank digital currency.”
It’s not just the US that is looking into stablecoins. Regulators from other countries have recently issued statements on their views about these new currency types, and there are even some banks who offer them as well!
In October of this year, Tharman Shanmugaratnam opened the doors for cryptocurrency in Singapore if it is regulated. He noted that digital assets like stablecoins could have a “useful” role to play with future finance and their introduction would not harm central banks’ efforts at monetary policy formulation either.
The United States Treasury has reportedly instructed that it will have enough legal power over USDT, which is a popular form of cryptocurrency token known for its stability. The SEC was also told to take action against any company operating as an exchange or broker with no license from them and falsely claiming they meet certain requirements in order not to permit unlicensed trading activity under Regulator Conduct Rules. If anything, this could be a green light for the regulator to establish guidelines on how to enforce these tokens.
The US authorities have been taking steps to regulate the cryptocurrency industry. These actions could be part of an effort them to establish a clearer framework for regulating this new and exciting technology in America, as well as internationally too.