IFTNews Cryptocurrency News: European Central Bank President Christine Lagarde stated in the discussion of "the world's biggest challenge" that how stablecoins are disguised as real currencies and they are completely related to real currencies.
She emphasized the importance of defining and classifying these scattered new assets. In the recently disclosed USDT stablecoin issued by tether , the President of the European Central Bank explained the false statement of the reserve currency supporting these digital assets in the form of legal tender. Almost 49% of US dollar reserves are used to support stablecoins issued by tether, which are actually unspecified commercial paper . In another incident, 9% of USDC issued by Circle and Coinbase was commercial paper.
The above disclosure illustrates the importance of regulating these digital assets or currencies. The issuers of these stablecoins need to be sufficiently scrutinized to avoid any false statements on their part. The President of the European Central Bank made it clear that users should have the freedom to convert assets into U.S. dollars at any time, so issuers need to disclose the correct figures.
Although Lagarde is critical of the rise of cryptocurrencies, she intends to put customer preferences first. She mentioned that if their customers prefer to use digital currencies instead of traditional media such as checks or cash, then the European Central Bank will provide digital currencies.
When asked about the European Central Bank’s digital euro plan and its launch in the next 4 years, Lagarde explained that the 2-year investigation phase will help the institution design a digital currency focusing on user preferences and good technology from merchants and Suggestions from other intermediaries. The investigation is scheduled to start in October.
To create such a digital currency requires a complete understanding of its security, ease of use, accessibility, acceptability and affordability outside the EU.
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