Central banks from 46 countries worldwide are exploring digital currency, however, only a few of them are actually going to launch their own coins. And most of them are not going to base their stablecoins on a blockchain.
As stablecoins gain momentum all over the world, financial regulators and banks insist that a flawless regulatory structure be prepared before approving global stablecoins, alluding to risks and gaps in the existing guidelines. Stablecoins need to prepare for preemptive regulations.
A study has been published showing that issuing stablecoins such as Tether and Circle’s USD Coin (USDC), don’t cause the prices of other digital currencies like Ether, Ripple, etc. to surge. So far, there have been few sentiments in the cryptoasset industry that the connection between stablecoin issuance and digital currency price is large.
Various organizations are working with governments and other NGOs to assist the world’s poorest farmers by helping them sustainably boost production and have easy access to new markets through stablecoins and cryptocurrencies, hence growing their sales and incomes.
Stablecoins climb up in market cap value, while cryptocurrencies still fail to recover from the post-pandemic knockout. This wasn’t left unnoticed by the world governments, and notably, G20, who already sought ways how to cope with a growing demand for stablecoins.
Amidst the chaos on the markets, stablecoins seems to have been least affected by the market crash. Analysts predict that over $7 Billion in investment funds will flow into the cryptocurrency market in the coming months.
The cryptocurrency market, which successfully rebounded on the morning of the 16th of March, turned into a bear market again. Bitcoin broke the $5,000 line and is now settling just above the $4600 price level.
Several financial authorities across the globe are finding it hard to make verdicts when it comes to Bitcoin, Libra and other digital currencies: overregulate the industry and risk losing the advantage to most businesses and the economy at large, or fail to act completely and make themselves more defenseless especially to those that intensify.
So far, 15 Central Banks from different parts of the world are jointly considering the creation and adoption of a blockchain to create a digital version of their currencies - a stablecoin. Some, like Russia's, have already taken action. But does it really make sense to talk about "state cryptocurrency" and why have central banks not exploited the virtuous examples already in circulation?