New Zealand’s Central Bank Governor Criticizes Stablecoins
At a parliamentary committee session, New Zealand central bank governor Adrian Orr voiced his skepticism towards stablecoins, labeling them as inherently unstable. He argued that their reliability is solely contingent on the financial reserves of the issuing entity. The governor also dismissed the notion of Bitcoin or any similar cryptocurrency as a viable substitute for fiat money or a store of value.
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At a parliamentary committee session, New Zealand central bank governor Adrian Orr voiced his skepticism towards stablecoins, labeling them as inherently unstable. He argued that their reliability is solely contingent on the financial reserves of the issuing entity. The governor also dismissed the notion of Bitcoin or any similar cryptocurrency as a viable substitute for fiat money or a store of value.
It’s got other purposes but it is not at all a substitute for, not even a compliment to, central bank money,
Adrian said.
His concerns extend to the potential threat that virtual assets pose to the stability of the global banking system. Nonetheless, he emphasized that, in contrast to various cryptocurrencies, the New Zealand dollar is underpinned by the country's democratically elected parliament and its central bank, which is committed to maintaining low and stable inflation rates.
Justin Schmidt, the Chief Operating Officer at Ondo Finance, had previously forecasted a promising future for yield-bearing stablecoins. He suggested they could offer numerous users, particularly in the Asia-Pacific region, the opportunity to earn interest on their investments in U.S. Treasury bonds.
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