by Nayab Fatima
Traditional financial institutions will have difficulty building major stablecoin business according to Matt Hougan of Bitwise, CIO. Not every traditional financial institution will successfully enter the stablecoin market according to Matt Hougan in his statement on February 26.
Brian Moynihan announced Bank of America would create a stablecoin connected to the US dollar once regulators make their position clear.Different stakeholders reacted to the Bank of America stablecoin announcement. People saw the move as encouraging crypto acceptance and thought of it like a CBDC but with a different name.
Stablecoin Policies and CBDC Concerns
One person on X doubted if CBDCs would enter the market with stablecoin branding. The person watching the news story described it as a CBDC type creation. Different industry members pointed out specific differences between the stablecoins private banks issue and digital central bank money.
The CBDC operates as a reserve liability of the central bank which distinctively contrasts with stablecoin issuer liabilities. This has huge consequences.”
Stablecoin control policies as well as CBDC designs from various nations prompt concerns about a US CBDC name change. On January 23 Donald Trump signed an executive order that made stablecoins backed by US dollars a priority while pushing for international growth of stablecoins supported by the dollar.
Tether CEO Criticizes Regulations
At the same time the order blocked US institutions from creating their own CBDC projects. During the Bank of America breakthrough people feared the effect Tether would face as provider of the biggest stablecoin. People thought that government oversight would create licensing benefits for banks instead of Tether providing stablecoin services.
Tether CEO Paolo Ardoino criticized the developing regulatory system as problematic during his answer to Rumble CEO Chris Pavlovski’s concern over new legislation limiting market competition. According to Pavlovski the new fiscal regulations want to give stablecoin authority to limited entities.
The company is dedicated to expanding into new markets despite current regulations. Ardoino explained in the past that Tether attracts most buyers from developing regions like Argentina, Turkey, and Vietnam.
People in the crypto business disagree about if bank-backed stablecoins help progress or help dangerous financial control from big institutions take over.
#blockchain #crypto, #decentralized, #distributed, #ledger
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