BIS General Manager: The events in 2022 raised “serious doubts” about the stable currency as a currency

According to reports, Agustin Carstens, the general manager of the Bank for International Settlements (BIS), which criticized the stable currency, said that the events in 2022 made people “seriously doubt the ability of the stable currency to play a role as a currency”. The stable currency is a cryptocurrency linked to the value of other assets such as sovereign currency, and cannot benefit from the regulatory requirements and protection applicable to bank deposits.

Interpretation of this information:

The general manager of the Bank for International Settlements (BIS) Agustin Carstens recently expressed his doubts on the ability of stable currencies to work as a currency. According to reports, he made this statement at a time when the events of 2022 had impacted the stability of these cryptocurrencies. Stable currencies are digital currencies that are linked to the value of other assets such as fiat currency, precious metals, or other cryptocurrencies. The idea behind stable currencies is that they are less volatile than other cryptocurrencies and can provide a stable investment option. However, Carstens’s statement highlights that stable currencies lack regulatory cover, compromising their ability to function as proper currencies.

The criticism on stable currencies coming from the General Manager of BIS is noteworthy, as the Bank is an international financial institution that serves as a hub for central banks. It plays a crucial role in international monetary policy-making and fosters cooperation among its member banks. The surging popularity of stable currencies as an investment option has put them under the scanner of central banks and regulatory authorities worldwide. Since stable currencies are not backed by any central bank, they are not beholden to any regulatory authority, leaving them open to misuse by cybercriminals, fraudsters, and money launderers.

Moreover, the future of stable currencies is uncertain because of the events of 2022, which Carstens mentioned. It is possible that the hacking of stable currencies and their market manipulations have eroded the confidence of investors, resulting in a loss of trust in these digital currencies. Stable currencies have historically been seen as a safe haven for investors looking for stable returns in a volatile market, with Tether leading the way for the concept of stablecoin. However, without proper regulatory oversight, institutional and retail investors are skeptical of these digital currencies’ potential as investment options.

In conclusion, the statement by Agustin Carstens, the general manager of the Bank for International Settlements, has expressed doubts about stable currencies’ efficacy as a currency. This statement highlights the lack of regulatory control over stable currencies, which does not inspire confidence in institutional and retail investors. Cybber attacks and market manipulations have further eroded the investors’ trust, casting a shadow over stable currencies’ future in the digital asset space.