G-20: Privately issued stablecoins are important but must be regulated
Categories: Crypto News US
G-20: Privately issued stablecoins are important but must be regulated
According to a Reuters report on July 17, 2022, Australian central bank governor Philip Lowe says stablecoins developed by private entities could be superior to central bank digital currencies (CBDCs), if regulated appropriately. Terra UST algorithmic stablecoin.
Lowe made the case for stablecoins at a time when top banks in various jurisdictions around the world are either studying the concept of central bank digital currencies (CBDCs) or are already starting to develop/roll out their own digital currency.
In the past, panelists at the G20 conference have argued that stablecoins issued by private firms may be better than these CBDCs if properly regulated.According to sources close to the matter, Australian Reserve Bank Governor Philip Lowe spoke during a panel discussion at the G20 finance officials meeting in Indonesia on July 17.
Lowe stressed the need for regulation of so-called stablecoins like bank deposits.While stablecoins were initially designed to enable crypto holders to protect their assets from negative volatility, these fiat-backed crypto assets have become a very important part of the crypto industry, as they are now available in the form of bitcoin.
Act as trading pairs for non-backed cryptocurrencies on exchanges and is used for liquidity provision on decentralized finance (DeFi) platforms. In 2021, the combined trading volume of stablecoins exceeded that of bitcoin and altcoins, reaching more than $2.96 trillion in average quarterly trading volume.
In the same discussion, Hong Kong Monetary Authority (HKMA) CEO Eddie Yu echoed similar sentiments explicitly stating that he firmly believes that more scrutiny of stablecoins will reduce risk and protect DeFi market participants.
While the sudden collapse of Do Kwon's algorithmic Terra (UST) stablecoin project in May 2022 has made it impossible for blockchain-focused businesses exposed to both UST and LUNA to survive this bear market with thousands of retail investors . Yu says that millions of dollars have been lost, he believes crypto and stablecoins are here to stay.