Is The Term “Stablecoin“ Accurate?
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Is stablecoin an accurate term to describe what it is?
According to the European Central bank, the term “stablecoin“ doesn’t actually accurately describe how the asset is backed.
The ECB released a report recently that explains all the possibilities of a digital euro and what would mean for the economy in Europe. The report discusses many different topics as well as the positive in batching digitisation in particular looks into the critical aspects of the cryptocurrency industry. Discussing stablecoins, the bank said the following:
“As regulatory principles are established and approaches are defined, the term ‘stablecoin’ should be replaced by a choice of terminology to shift the emphasis away from the issuer’s promise of stability.”
In this report, the bank essentially warned that even though stablecoins are advertised as assets that won’t be able to fluctuate in price, there is no guarantee that anyone’s funds will be insured.
The President of the European Central bank, Christine Lagarde believes that issuing a digital euro will have a lot more positives and negatives when it comes to the European Union. She believes that the impact of a digital euro will “increase our autonomy and ensure that Europe is better protected in the world of tomorrow. As legislators, you have a crucial role to play in designing policies that can revitalise our economies.”