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31 July 2021

Stablecoins Are Not Money, Says Fed Attorney | Crypto Briefing

Stablecoins Are Not Money, Says Fed Attorney | Crypto Briefing


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dollar-backed stablecoins issued by various private entities.

Stablecoins that are backed 1:1 with USD have exploded in popularity, primarily as a replacement for traditional banking systems for the cryptocurrency sector.

They said that due to market fears and lack of transparency of funds backing them, They also said that stablecoins fail to satisfy the principle of no-questions-asked (NQA) due to market fears and lack of transparency surrounding the funds backing them.

The authors added that that the value of various stablecoins such as Tether remains opaque due to lack of transparency, and hence pose risks like a bank-run.

This lack of transparency, the authors said, is a significant concern for the fast-growing stablecoin market.

The paper comes just a few days after Fed chair Jerome Powell discussed stablecoins and cryptocurrencies with the Senate Banking Committee, where he iterated that regulators should look into commercial stablecoins issued by private entities

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