Connect with us

Stocks

Stablecoin Policy Interest Remains Hot as Finance Bigwigs Dish on CBDCs

Source: Shutterstock
Crypto prices might not be doing so hot, but crypto policy talk is certainly on fire right now. Prominent financial players have been commenting on the market in recent days, especially the stablecoin asset class. As more …

Source: Shutterstock

Crypto prices might not be doing so hot, but crypto policy talk is certainly on fire right now. Prominent financial players have been commenting on the market in recent days, especially the stablecoin asset class. As more governments opt to regulate crypto, there has also been talk about whether CBDCs are a worthy pursuit. From the sounds of it, some think highly of the idea.

Advertisement

Of course, it’s hard to oppose CBDCs after the recent rampant volatility in the stablecoin industry. This month, Terra’s $1-pegged stablecoin was thrown into the spotlight when it crashed and burned to today’s 5 cent price point. Up until then, stablecoins had been considered some of the safest bets in DeFi.

In the aftermath of the crash, many have come to reject crypto altogether. So, it makes sense that people are speaking up in support of stablecoins from controlled, centralized entities. These banks can ensure their currencies are collateralized and secure from volatility in a way that other stablecoin projects cannot.

Advertisement

Stablecoin Talks Continue as Finance Experts and Policymakers Look to CBDCs

Financial policy has been a major talking point this week in particular, with thousands of prominent industry players in Davos, Switzerland for the World Economic Forum’s 2022 meeting. Both in Davos and abroad, talk is turning to crypto and stablecoins.

Advertisement

ECB president Christine Lagarde has perhaps stoked the most ire from crypto faithfuls this week. Recently, Lagarde said digital assets are flat-out worthless and “based on nothing.”  Now, she is doubling down; she said that, while her son does invest in the space, his investments have convinced her to stay out of crypto entirely. Despite this bearishness, though, Lagarde did voice support for a Euro CBDC. “The day when we have the central bank digital currency, any digital euro, I will guarantee it,” she said. Lagarde added that CBDCs are “vastly different” from other cryptos.

Meanwhile, Federal Reserve Vice Chair Lael Brainard has also talked about CBDCs this week — and she sounds optimistic. On Thursday morning, Brainard spoke to the House Financial Services Committee about the potential for a U.S. digital dollar. She believes CBDCs can “coexist with and be complementary to stablecoins and commercial bank money.”

Advertisement

This comes at a time when plenty of other governments are pursuing their own CBDC ventures with gusto. As the ECB and Fed continue to speculate about their own stablecoin ventures, the Brazilian central bank is partnering up with Stellar Partners to develop its own CBDC. Norway is making its way into the space as well, using an Ethereum (ETH-USD) layer-2 network to test its own digital currency.

On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Advertisement

More From InvestorPlace

  • Stock Prodigy Who Found NIO at $2… Says Buy THIS
  • It doesn’t matter if you have $500 in savings or $5 million. Do this now.
  • Get in Now on Tiny $3 ‘Forever Battery’ Stock

The post Stablecoin Policy Interest Remains Hot as Finance Bigwigs Dish on CBDCs appeared first on InvestorPlace.

InvestorPlace| InvestorPlace

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *