BIS Finds Stablecoins Can't Always Maintain Asset Peg
Date: 2023-11-20 Author: Dima Zakharov Categories: IN WORLD
Stability Concerns Around Stablecoins
Stablecoins, a subset of cryptocurrencies aiming to retain a stable value relative to a specified asset, have been scrutinized by BIS experts. Analyzing 68 stablecoins, these specialists found none capable of consistently maintaining parity with their designated asset.
Moreover, BIS specialists assert that there's presently no guarantee that stablecoin issuers could redeem users' coins in full.
"As a result, we conclude that the circulating stablecoins today do not meet the key criteria to be considered a safe store of value or a reliable medium of exchange in the real economy," experts concluded.
Analysts also note that without additional data on stablecoin usage, it's challenging to assess the risks these digital assets pose to the smooth functioning of payment systems and broader financial stability.
Impact on Cryptocurrency Markets
Earlier, BlackRock, a leading contender in the Bitcoin ETF race, expressed concerns about stablecoins like USDT and USDC, citing them as a potential threat to the world's foremost cryptocurrency.
Recently, the world's largest cryptocurrency exchange, Binance, announced the launch of a stablecoin pegged to the Kazakh digital tenge, aiming for a 1:1 peg with the national currency.
This scrutiny from BIS casts doubt on the reliability of stablecoins, raising questions about their viability as a dependable financial instrument and their role in the broader cryptocurrency landscape.
