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ECB Top Officials Back Europe’s CBDC Initiative Over Cryptocurrencies
The existing model’s stability is based on using public money as an anchor. Non-European businesses might gain a monopoly on
The ECB Requests Expedited Regulation for Stablecoins
The ECB requested that stablecoins be subjected to a greater regulatory supervision as soon as possible. Continue reading The ECB Requests Expedited Regulation for Stablecoins at DailyCoin.com.
Failure Of Stablecoins Could Have Catastrophic Broader Financial Implications: ECB
Given that the largest stablecoins serve a critical function for crypto-asset markets’ liquidity, the failure of one of the largest stablecoins could have wide-ranging implications for crypto-asset markets and in turn contagion effects on the financial system, according to the European Central Bank (ECB). A report released by the ECB on stablecoins and decentralized finance states a run on a single stablecoin could also prove catastrophic for the broader financial system through large-scale redemptions of reserve assets comprising traditional assets like government bonds or commercial paper. The Central Bank also pointed out that the crash of the Terra (CRYPTO: LUNA) blockchain and its native token LUNA exposed the vulnerabilities of the crypto-asset ecosystem and that amid the ensuing crypto-asset market stress, the price of Tether came under pressure, with the largest stablecoin temporarily losing its peg. The centralized stablecoin faced large outflows of more than 10% of its market capitalization, which it had to redeem by liquidating reserve assets. Stablecoins cannot be used for payment in the real economy. The ECB notes that to date, the transaction speed and cost of stablecoins as well as their redemption terms and conditions have proven inadequate for use in real economy payments. In addition, European payment service providers have not been very active in stablecoin markets thus far, and activities vary considerably among the EU member states. Urgent regulations needed While the risk of financial instability due to the failure of major stablecoins in the euro area is currently limited, if their growth continues at the current pace, stablecoins may cause major damage, if left unchecked. “Existing stablecoins need to be brought into the regulatory perimeter with urgency,” the ECB states. Also Read: Is Shiba Inu Gaining Legitimacy? Updates On Layer 2 Shibarium, SHI Stablecoin, And ShibaSwap DEX Internationally coordinated approach to mitigate risks from DeFi DeFi to a large extent mimics the traditional financial markets through technology-enabled innovation, however, its novel technology and method of service provision can amplify certain vulnerabilities and incur additional specific risks. Citing the example of the TerraUSD crash, the ECB stated that the lack of traditional centralized entry points for regulation and its opaque and anonymous nature pose challenges for policymakers in terms of enforcement and effective regulation and supervision. “As vulnerabilities start to build, an internationally coordinated approach is needed to mitigate risks from DeFi. This would entail a careful analysis to disentangle actual regulatory gaps from lack of enforcement. Where regulatory gaps are identified, relevant entry points for regulation as well as regulatory standards are needed,” the ECB states. © 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.Benzinga•
ECB President Lagarde: Crypto Staking and Lending Must Be Regulated
European Central Bank president Christine Lagarde argued for more regulation of the crypto space, covering lending and staking.
ECB’s Executive Board Emphasizes Need For Planned Digital Euro Launch
It is conceivable to prevent the digital euro from being used as an investment option. Panetta said it would take
ECB Chief and Bitcoin Critic Christine Lagarde Says Her Son Trades Crypto
But the central bank chief said she still wouldn’t go near digital assets.
ECB Steps Up Warnings About Crypto Risks
The European Central Bank (ECB) has accentuated its campaign on the risks of investing in cryptocurrencies and other digital assets at a time when the industry is going through its worst historical crisis. Continue reading ECB Steps Up Warnings About Crypto Risks at DailyCoin.com.
Crypto Poses Risk to Financial Stability in ‘Present Trajectory’: ECB
Europe’s central bank has just released its latest outlook on crypto’s risk to financial stability. Its conclusion? Change needs to happen.
ECB President Criticizes Cryptocurrencies, Backs Digital Euro Instead
The crisis was addressed during a meeting of the G7 finance ministers. A digital euro is expected to be introduced