Stablecoins are better than CBDC: Governor of Bank of Australia
Categories: Crypto News US
Stablecoins are better than CBDC: Governor of Bank of Australia
According to Bank of Australia Governor Philip Lowe, private firm stablecoins may be better than central bank-issued digital currencies (CBDCs). The comparison is better if businesses are properly regulated. Philip Lowe believes that there are dangers in dealing with cryptocurrency that stronger regulations may be undermined, but that private companies should create the technology.
Privately issued stablecoins are better than CBDCs, Lowe says, in a speech Sunday at the G20 finance ministry and central bank governors conference in Bali, Australian Reserve Bank governor Philip Lowe, using the term cryptocurrency or asset. I was hesitant, claiming that he had no monetary virtue.
In May, the Terra USD stablecoin UST, which has since been renamed as the Terra Classic USD (USTC), lost its peg and halved the market cap of the entire Terra Classic ecosystem. This triggered a multi-billion dollar sweeping effect that caused Tether (USDT) to be temporarily de-pegged from the DEI stablecoin. Lowe believes that private money has many issues, and businesses have always wanted to use state-backed currencies.
However, he also believes that unless regulations are in place, companies are more likely than governments to develop successful stablecoins pegged to traditional currencies. While the rules would come from the government, Lowe said it would be the norm if the private sector developed it. In his opinion, private businesses are better than the central bank at inventing new elements for cryptocurrency.
He added that setting up a digital token system would also cost the central bank a significant amount. In other news, Australian officials have advised that a rulebook-style framework is the biggest way to address the threats associated with crypto. Instead of regulating cryptocurrency directly, they aim to regulate crypto exchanges.