Professor of Berkeley University is sure that the so-called stablecoins are a “myth”. The statement was published on September 11.
Analyzing the emerging market, which includes such well-known assets as Tether (USDT), Professor of Economics Barry Eichengreen said that stablecoins cannot be considered safe only because they are backed by real assets.
Eichengreen noted that “conventional cryptocurrencies, such as Bitcoin, are traded at wildly fluctuating prices, which means that their purchasing … is very unstable,” adding:
“Stable coins purport to solve these problems. Because their value is stable in terms of dollars or their equivalent, they are attractive as units of account and stores of value. They are not mere vehicles for financial speculation. But this doesn’t mean that they are viable.”
It is worth noting that the cryptocurrency market is regularly replenished with new stablecoins, many of which come directly to the market or through financial investments.
We remind you that earlier this week the twins Winklevoss and Paxos received official permission to launch their own stablecoins. Also, last month the bank of Liechtenstein announced the development of its own stablecoin.
Eichengreen, in turn, identified three types of stablecoins, based on the fullness of the provision of coins, and noted that each type has its drawbacks.
For example, in the case of Tether, there is much debate about the dollar’s strength of the coin and the costs of issuing and distributing the coin, raising doubts about scalability. Eichengreen reported:
“In other words, it is not obvious that the model will scale, or that governments will let it.”
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