Bank of England Official Says Stablecoin Use May Need Limits (bloomberg.com) 22
Bank of England Deputy Governor Jon Cunliffe said regulators may need to impose a limit on using so-called stablecoins for payments as policy makers try to balance the need for innovation with its accompanying concerns. From a report: Cunliffe raised the prospect that rapid innovation in payment systems could bring new risks for customers and financial markets as a whole. "While, from a public policy perspective, we want competition and innovation in payments we need to guard against rapid, disruptive change that does not allow the financial system time to adjust and could therefore threaten financial stability," Cunliffe said Monday in a text of remarks at an event hosted by fintech industry body Innovate Finance. Regulators would need to decide "whether there should be limits, initially at any rate, on stablecoins used for payments." Stablecoins, which are currently issued by non-bank businesses, are pegged to the value of an asset. They are designed to maintain a stable value, unlike cryptocurrencies such as bitcoin, while using ledger technology to record and transfer ownership. Cunliffe noted that "so far their use has been confined to facilitating trading and other transactions in the world of crypto assets," but that there were proposals to use them for other, broader payment purposes. "Stablecoins offer the possibility of greater efficiency and functionality in payments," Cunliffe said. But they currently do not fit into any regulatory framework, unlike the existing payments systems and money issued by commercial banks.
"financial system needs time to adjust" (Score:1)
This is to protect the incumbents (of "too big to fail" infamy), not consumers/customers/citizens/normal people.
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No, not the brain farts.
It's the obligatory joke: "What could possibly go wrong?"
Time to check the fresh Apple story for the same joke and the dying stories for any sort of Funny. One hot lead in the driverless cars story...
Really, that stirred up the angry censor troll? Or just the abundance of censor mod points?
Um. Understatement of the year (Score:4, Insightful)
We have very basic consumer protection laws that cover this. I can’t sell a piece of cow dung as “mytotallyreal goldcoin”. I’ll go to jail. It’s literally raining cryptobro corpses and every single exchange is either closed, criminally looted, or currently under investigation for some other sort of shenanigans.
Why are regulators allowing this anymore?
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Presumably these would fall under existing laws or legal requirements where somethin
Re:Um. Understatement of the year (Score:4, Insightful)
Unfortunately, the stablecoin scammers have managed to deceive or corrupt enough "auditors" that you can't even really trust an external audit any more.
Got free cash that you don't mind losing while you gamble oops I mean invest in crypto? Go for it. Stablecoins are great.
For reasonable people who are interested in real investments, repeat after me. Stablecoins are scams. It's a scam. It's a scam. It's a scam. It's a scam.
Stop conflating tether with everything else (Score:2)
That's patently false for USDC and GUSD, both of which are audited and run by firms with very solid reputations with state regulators in the US.
Re:Stop conflating tether with everything else (Score:4, Insightful)
Until then, I consider them a trap to fleece fools and will steer clear. I used to trust the top-tier auditors. Then I watched them get SVB completely, totally, jaw-droppingly wrong. If it doesn’t pass my own personal sniff test, I’m not putting my money in it. To me, the current “stablecoins” stink as bad as yesterdays cryptocoins do.
Re:Stop conflating Terra with Tether (Score:3)
That's patently false for USDC and GUSD, both of which are audited and run by firms with very solid reputations
USDT has been audited by a major accounting firm to show over $66K million (UK terminology) or $66 billion (USA terminology) in backing reserves.
https://tether.to/en/tether-re... [tether.to].
You are thinking TerraUSD (UST). You are conflating the phonetically similar Terra UST with Tether USDT. It is an easy mistake to make.
Terra's UST collapse to 2 cents on the dollar:
https://www.coindesk.com/price/terrausd
versus
Tether's USDT stability within fractions of a cent for the vast majority of its life:
https: [google.com]
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That's patently false for USDC and GUSD, both of which are audited and run by firms with very solid reputations
USDT has been audited by a major accounting firm to show over $66K million (UK terminology) or $66 billion (USA terminology) in backing reserves.
https://tether.to/en/tether-re... [tether.to].
That's not an audit (it was written by an auditor).
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That audit shows that ~15% of Tether's holdings are "other investments" and "secured loans". What are those unspecified investments? What are the loans secured against? The audit doesn't say, in any useful level of detail. If they're VC bets on crypto startups and loans against crypto, I don't like Tether's odds of being solvent.
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That's patently false for USDC and GUSD, both of which are audited and run by firms with very solid reputations with state regulators in the US.
I can only find that they've attested circulating coin and assets held?
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I can only find that they've attested circulating coin and assets held?
For as enormous of a financial footprint as a widely-deployed stablecoin is, that level of attestation is as much of an audit as is practical. A full audit would verify the authenticity of every USDC ever minted or the authenticity of every GUSD ever minted (or in our prior pair of comments regarding Tether above, where you likewise protested that attestations fall below the level of a full audit: the authenticity of every USDT ever minted). By comparison, if one audits the gold bars and ingots in a Swiss
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I can only find that they've attested circulating coin and assets held?
For as enormous of a financial footprint as a widely-deployed stablecoin is, that level of attestation is as much of an audit as is practical. A full audit would verify the authenticity of every USDC ever minted or the authenticity of every GUSD ever minted (or in our prior pair of comments regarding Tether above, where you likewise protested that attestations fall below the level of a full audit: the authenticity of every USDT ever minted). By comparison, if one audits the gold bars and ingots in a Swiss bank's vault in Zürich, the auditing firm can inventory every single one of the gold bars & ingots on premises in a well-defined perimeter of room(s), then see if the quantity & identity in stock on premises within those room(s) matches the quantity & identity on the register-books for each account, due to there being perhaps only thousands of such accounts instead of millions or billions of such minted stablecoins. Attestation makes a verified claim based on a condition. That condition is: if the number of USDT stablecoins minted is actually 66K million (UK notation) or 66 billion (USA notation) as Tether claims but that we the accounting firm could not practically inventory for genuine authenticity, then these inventoried assets match in quantity to the purported stablecoin quantity—likewise for USDC or GUSD.
I'm not trying to tell you those coins are scams, I don't know. But I'm pretty sure that a company that selectively asserted liabilities and assets without an audit would be a hard sell in other circumstances and I encourage you and everyone else who mistook an assertion for an audit to look at a publicly available audit report for a company with a similar market cap (they are available for all publicly traded companies) to get a feel for what an audit would look like.
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That's not the case any more. That's what the "stablecoin bros" say on their websites, but it's a straight-up lie. There isn't anywhere close to 1$ of real value locked up somewhere for each "1$ stabletoken". Every time someone ACTUALLY looks at it, they realize that the real dollars have been "lent" between a dozen different crypto exchanges for "collateral".
And you think your bank has 1$ in real cash locked in a vault somewhere for each 1$ you hold in their account?
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London used to be the centre of the World's financial markets, but since 12 years of Tory rule and Brexit have accelerated Britain's decline to the point where the only assets still being traded there are stolen from Russia.
Crypto is ideal for buying a mansion in West Hampstead if you're trying to evade sanctions, like this little girl. [nypost.com]
Summary: (Score:1)
"Stablecoin is not stable".
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Ummm they're already being used this way... (Score:2)
There are over 250 companies, some of them big names, which accept stablcoins via BitPay [bitpay.com]. The horse of the barn my dudes.
The thing is, aside from Tether, stablecoins are great for the financial sector. USDC and GUSD are both heavily audited and in good shape. They function essentially as floating b
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The thing is, aside from Tether, stablecoins are great for the financial sector. USDC and GUSD are both heavily audited and in good shape. They function essentially as floating bank drafts. I don't get the hostility toward the post-Tether ones like USDC and GUSD
I am rather certain that you intend Terra's UST, not Tether's USDT. They are phonetically similar; as reported in the linked article below, it is an easy error to make. TerraUSD is the one that took it on the chin pretty hard for no one's team in 2022, rapidly losing 45 cents on the dollar in its initial scandal, whereas Tether's USDT had a temporary minor fluctuation in 2018 that took it 11 cents up & down from $1, which has never recurred since from mid-2019 to present: no USDT fluctuations plus or