Central Banks Recommended to Ban Stablecoins
 | By: banachtarski April 15, 2020, 7:19 a.m. |
Saw this on the news earlier today, curious to hear what you guys think!
"Central banks push for heavy-duty regulation of centralized, privately-issued global stablecoins and consider prohibiting decentralized ones. Fiat-pegged cryptocurrencies are coming under scrutiny, based on recommendations from the Financial Stability Board."
Key Takeaways
The Financial Stability Board (FSB) outlined ten recommendations to central banks for regulating stablecoins, including outright prohibition.
The FSB is an international entity that provides suggestions on the global financial system. It comprises central banks and finance ministries from major G20 economies.
The recommendations are to be presented before an audience of G20 countries, and reference major stablecoins, including USDT, USDC, TUSD, PAX, and DAI.
The feeling on my panel today with Trust Token (TUSD), was that for them, it's more of the same. They're already complying with regulators and will continue to do so. I imagine the case is similar for many of the folks mentioned.
But I do think it means that if you're currently acting as a permissionless stablecoin like MakerDAO, but can actually be regulated (aka: not decentralized no straightforward path to decentralization)—you will eventually be regulated.
The best positioned solutions are ones at the extreme ends of the spectrum, either:
- Fully Compliant
- Fully Decentralized
It's a hit to the ethos of the DeFi community in the sense that developers don't want to feel this alternate ecosystem they've been building, has been constructed on shaky ground.
But it was always on shaky ground with DAI to begin with. That has simply been brought to the surface.
There's a joy to building important things together in the open source community—and this can actually be blinding at times.
At some level, builders understand that a regulated programmable money, doesn't require a decentralized smart-contract platform. DAI was a passable decentralized primitive for a time, but it really isn't anymore.
Now there's this void to fill—and the bar has been raised. Can't really sweep the "liquidity crisis" problems under the rug anymore, and can't sweep the collateral asset problem under either.
Really the "volatility problem" itself is a mask for an underlying "hypercorrelation" problem—we need all hands on deck addressing that first.
follow me on twitter: @evankuo
Connect with Twitter
Curious that this came out a day or two before TheBlock is reporting that: "China is set to launch its national blockchain platform next week"