European Central Bank proposes to revise the concept of “stablecoin”

According to regulators, now the term does not reflect reality.

The experts from the European Central Bank (ECB) came to the conclusion that the term stablecoins needs to be replaced because it is too ambiguous. The regulator came up with a report where its vision of the problems was reflected.

In the publication, experts compared stablecoins with other forms of cryptocurrencies. This type of digital assets, in their opinion, can represent an alternative tool for preserving value. At the same time, the ECB team also does not exclude the possibility of using stablecoins as a new payment instrument.

In the report, “stable” cryptocurrencies are referred to as digital units of value that do not represent currency in its traditional sense. At the same time, experts emphasize that stablecoins use tools to reduce price fluctuations in relation to national currencies.

Table of characteristics of stablecoins, which includes types of cryptocurrency collateral, the nuances of the formation of the exchange rate and other features

One of the claims of the ECB team is that the generally accepted term for the type of cryptocurrency under discussion does not always fully correspond to reality. In particular, the rate of a “stable” asset may not be so stable. So, according to experts, due to problems in terminology, there are risks of misperception of cryptocurrency.

The ECB team noted that many have an unreasonably positive attitude towards stablecoins. At the same time, the main reason for delusions is lack of understanding of the real principles of the formation of the rate of such cryptocurrencies and the peculiarities of their technical component.

Chart showing the ratio of the trading volumes of classic cryptocurrencies to bitcoin, stablecoins and the most popular “stable” cryptocurrency – Tether

We will remind, there was information earlier that the experts of the European Commission plan to tighten control over stablecoins, which are pegged to the euro rate. At the same time, the cryptoversion of the national currency is being tested in Europe. We will find out soon whether a digital analogue of the euro will be released. It is known that even in the case of a positive decision on the launch of the national cryptocurrency, the latter, according to representatives of regulators, will not become a complete replacement for fiat.

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