How Blockchain Revolution is Driving Central Banks to Issue Crypto Backed by FIAT

By Nivesh Rustgi
Published November 16, 2019 Updated November 29, 2019
Best Buy In

Exchanges

Sportsbook

Wallet

Facebook Stablecoin

How Blockchain Revolution is Driving Central Banks to Issue Crypto Backed by FIAT

By Nivesh Rustgi
Published November 16, 2019 Updated November 29, 2019
  • US Feds adds stablecoins to the list of risks of the potential risk to the financial system.
  • The CSO of Blockstream, Samson Mow, explains how stablecoins won’t last for long, and it will to ‘hyperbitcoinization.’
  • China’s push towards digital renminbi could act as the catalyst for further adoption of crypto.

In its recent report on financial stability, the Federal Reserve in the US said the economy was resilient. While rising debt is a reason for worry, there is still time before the destructive effects of rising corporate deficits will affect the economy.

advertisement

Nevertheless, that does not mean that it is not prone to adversities. According to the report, low-interest rates and stablecoins pose a severe risk to stability in the future. The report concluded,

“The possibility for a stablecoin payment network to quickly achieve global scale introduces important challenges and risks related to financial stability, monetary policy, safeguards against money laundering and terrorist financing, and consumer and investor protection,”

While crypto-traders continue to stifle for the best blockchain and crypto in the space, the big tech companies are infiltrating it faster than the market perceives. If you are new to this field, you can consider reading about what is blockchain technology & know the basics which lead to the tremendous growth of the industry as a whole.

Privately Issued Stablecoins and International Competition Leaves Little Choice

A blockchain-based currency provides for seamless, transparent, and efficient global payments. However, their application can be exploited for money laundering and other international crimes. Hence, the western governments of the world have been wary of them.

Stablecoins has become mainstream in 2019 after Facebook’s Libra announcement and China’s push towards Digital Renminbi. There are various other independent private efforts from the likes of Facebook, JP Morgan, and Walmart to issue USD backed stablecoins. Hence, the most natural path for the central banks will be issue to one of their own.

Leading crypto analyst and entrepreneur, Samson Mow talked about the current state of the stablecoins market with USDT leading the space. He said,

They’re a temporary thing. The main threat they face is from the national cryptocurrencies. How open will those national cryptocurrencies be? …But stablecoins will then have no reason to exist with a national cryptocurrency.

He also added that this would eventually lead to ‘hyperbitcoinization.’ The growth of stablecoins and national cryptocurrencies is leading the world towards an of bitcoin.

Do you agree with the analysts’ views? Please share your views with us.  

advertisement
Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Nivesh Rustgi
1181 Articles
Nivesh from Engineering Background is a full-time Crypto Analyst at Coingape. He is an atheist who believes in love and cultural diversity. He believes that Cryptocurrency is a necessity to deter corruption. He holds small amounts of cryptocurrencies. Faith and fear are two sides of the same coin. Follow him on Twitter at @nivishoes or mail him at nivesh(at)coingape.com

Loading Next Story