New Zealand banker criticizes BTC and stablecoins, why?

Adrian Orr, governor of the Central Bank of New Zealand, has been critical of the credibility of cryptocurrencies in particular. Fixed Currencies and Bitcoin, an alternative to traditional fiat money.

Orr's incisive commentary sheds light on the inherent risks and uncertainties associated with these digital assets.

Banker on Bitcoin and stability of stablecoins

The Fixed CurrenciesCryptocurrency tokens tied to the value of a stable asset, such as fiat currency, are often touted for their potential to provide stability in a volatile cryptocurrency market.

however, Orr insists that this consistency is illusory And finance is based on perception rather than reality. noticed:

“Stablecoins are huge contradictions and oxymorons. They are only the balance sheet of the person issuing that stablecoin.

Also read: Inflation and Monetary Policy: An Explanation of Central Banks

This statement highlights the dangerous nature of trusting an asset. He expressed deep concern about the role of cryptocurrencies in the broader financial ecosystem. He questioned the ability of money to fulfill its vital functions.

Among them, being A exchange, a store of value and a unit of account. Or firmly believes Bitcoin And other cryptocurrencies are lacking in these features. He said:

“Bitcoin is not a medium of exchange, A A store of value or unit of account, but people try to use it.

This skepticism has the potential to undermine the global financial system of these digital currencies, which is shared by many central banks around the world.

Despite these fears, total market capitalization Fixed Currencies It is currently at an all-time high of over $137 billion.

The climate for stablecoins in the US

Meanwhile, in the United States, regulations Fixed Currencies A change seems to be approaching. Congresswoman Maxine Waters noted that restraint Fixed Currencies to be completed. This move toward regulation is a response to the growing need for oversight in an industry marked by rapid expansion and innovation.

The immediate regulations are expected to provide much-needed clarity and protection to consumers and financial institutions. Leveling the playing field between traditional banks and the cryptocurrency sector.

Also read: How are stablecoins regulated globally?

As the debate over the role and regulation of cryptocurrencies continues, Orr's comments remind us of the challenges and complexities of integrating this new form of money into the established financial system.

Their experience and caution provide a valuable perspective on the ongoing debate about the future of finance in a digital world.

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