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The G7 Agreed That Global Stablecoins are a Real Challenge for Financial Stability

14 October 2019 14:39, UTC
The G7 Agreed That Global Stablecoins are a Real Challenge for Financial Stability

The G7, which is comprised of the largest seven economies all over the world has drafted a report where they all agree that stablecoins that operate on a global level pose a serious threat to the financial stability of the modern world.

According to that report, any stablecoin who has the ambition to perform on a global level should not be allowed to open up shop before going through all of the necessary regulatory checks and complying with all of them. This is a serious hit to future projects, as adhering to every variation of financial regulation is impossible due to contradictions with various frameworks.

The argument that the G7 brings up is the scalability of said stablecoins. Although the coin is supposed to remain equivalent to a single currency unit, the scalability of cryptocurrencies cannot be denied. If too much demand befalls the coin, it will have to increase somehow, and if the traction decreases, then the whole community will be in danger of inflation.

The G7 does not necessarily direct this report to Facebook’s Libra, but rather to all stablecoins that have a global presence. Coins like USDT come to mind. The report will be sent to the Finance Ministers of almost every country, which they will have to analyze and make a definitive decision on. This could be yet another major hit on Libra, considering it lost its biggest Association members just recently.



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