Stable cryptocurrencies, such as USDT and USDC, are increasingly raising concerns among central banks, who see them as a threat to monetary policy and state sovereignty.
The State of Stablecoins and Their Impact on Monetary Policy
According to Christine Lagarde, President of the European Central Bank, stablecoins undermine monetary policy and could jeopardize state sovereignty. Lagarde argues that this form of cryptocurrency, backed by fiat currencies, can create confusion between money, means of payment, and infrastructure.
Regulating Stablecoins: Necessity vs. Controversy
The growing popularity of stablecoins prompts the need for regulation. While the U.S. has enacted a legal framework for stablecoins, Europe is still hesitating on the launch of the digital euro. The Bank of Korea is also inclined towards regulation to prevent capital outflows induced by stablecoins.
The Future of Stablecoins: Growth and Challenges for Central Banks
Currently, the total volume of stablecoins stands at around $160 billion, and their usage continues to rise. Over 80 central banks are working on their digital currencies, indicating significant shifts in the financial landscape. As Jerome Powell notes, a regulatory framework for stablecoins is necessary, highlighting their growing importance in the future.
Stablecoins are becoming a crucial element of the financial market, and their impact on the economy raises alarms among central banks. Regulating this area is becoming an inevitable step amid the rising popularity of these cryptocurrencies.
