The official of the FMI He warned about the risks present in algorithmic stablecoins and also mentioned the danger of those that were supposedly backed 1=1 with fiat fiat currency is “legal tender” backed by a central government, such as the Federal Reserve, and with its own banking system, such as fractional reserve banking. It can take the form of physical cash, or it can be represented electronically, such as with bank credit. currencies. He also pointed out the need for global regulation of these assets.
- Algorithmic stablecoins are risky, even more so in this bear someone who believes that prices in a given market will decline over an extended period. Such a person might be referred to as “bearish.” market.
- He referred to the case of UST, Terra’s former stablecoin.
- Stablecoins as Tether are not 100% supported at a ratio of 1=1.
- Global regulations are needed to address a place where cryptocurrency can be sent to and from, in the form of a string of letters and numbers. stablecoins.
El director de mercados de capital capital is most commonly defined as the large sum of money you would use to invest. para el International Monetary Fund (IMF), Tobias Adrian, pointed out that stablecoins, especially those operating under an algorithmic model, could prove to be detrimental to investors.
El peligro de las stablecoins algorítmicas
Adrian’s statements came during an interview conducted by the media outlet Yahoo! Finance, in which he warned about the risks associated with investing in this type of assets, which are prone to fail now that the crypto market an area or arena, online or offline, in which commercial dealings are conducted. is facing a bearish period that could compromise investors’ profits.
“We could see more liquidations, both in cryptoassets and in the risk asset markets, such as equities… there could be more failures in some of the cryptocurrency cryptocurrencies are digital currencies that use cryptographic technologies to secure their operation. offerings, in particular, some of the algorithmic stablecoins that have been hit the hardest, and there are others that could fail as well.”
The official of the FMI clearly alluded to the case of the ecosystem of Earth, whose stablecoin a cryptocurrency with extremely low volatility, sometimes used as a means of portfolio diversification. Examples include gold-backed cryptocurrency or fiat-pegged cryptocurrency. UST (USTC) was hit hard after the fall in the price of the token a digital unit designed with utility in mind, providing access and use of a larger crypto economic system. LUNA (LUNC), events that ended up generating losses to a large number of users who had invested their money in these cryptocurrencies.
Tether is not free from criticism
But the criticism of stablecoins didn’t stop there, as Adrian also mentioned those that were allegedly backed by USD reserves, referring specifically to Tether (USDT), currency currency is a medium of exchange that defines value. issued by the exchange businesses that allow customers to trade cryptocurrencies for fiat money or other cryptocurrencies. partner company Bitfinex.
On this type of coins, the official of the FMI he commented:
“There’s some vulnerability there, because they’re not backed one-to-one… [Some fiat-backed stable currencies] are backed by somewhat risky assets… it’s certainly a vulnerability that some of the stable currencies are not fully backed by cash-like assets.”
Let’s keep in mind that one of the biggest criticisms that Tether has to bear is the opacity with which in the past they handled the stablecoin reserves, which led many analysts to presume that the currency was not properly backed in a 1 = 1 ratio as its managers claimed. This led to problems that even reached the legal level, as the company had to face legal proceedings in the U.S. to clarify its situation.
Need for better regulation
Finally, Adrian said that given the rise of stablecoins and the number of investors that are attracted to them, there is a growing need for a regulatory approach applicable to these assets, which should have a global scope to protect the people involved.
Here he noted that regulators should focus on ensuring that cryptocurrency exchanges and wallet providers do due diligence on cryptocurrencies before they can be traded:
“There are 40,000 coins out there….. Regulating the coins themselves will be difficult, but regulating the entry points, such as exchanges and wallet a place where cryptocurrency users can store, send and receive digital assets. providers, to invest investing is when you put money in a financial scheme with the intent of making a gain. in those coins, that’s something very concrete and doable.”
- US Congress delays stablecoin bill to after August recess
- UK to introduce rules for stablecoins
- International bodies publish guide to stablecoin regulations
Version by Angel Di Matteo / DiarioBitcoin
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