WELLINGTON: New Zealand central bank governor Adrian Orr has issued a warning about crypto currencies such as stablecoins, saying they are no substitute for fiat money.
Stablecoins are “the biggest misnomers” and “oxymorons”, Orr told a parliamentary committee yesterday in Wellington.
“Stablecoins are not stable. They’re only as good as the balance sheet of the person offering that stablecoin.”
Stablecoins, a form of crypto token pegged to another asset, use large reserves to support their value.
They can be buffeted by troubles in the traditional financial world, and some worry they could have the potential to rock real-world markets in return.
Orr was asked whether central banks are concerned that independent digital currencies could undermine the global financial system.
“The answer is yes, critically concerned,” he said. — Bloomberg
