A recent report by the Bank for International Settlements raises concerns about stablecoins’ ability to maintain parity with their pegged assets, challenging their stability and reliability as a digital currency.
In a recent report by the Bank for International Settlements (BIS), stablecoins, a type of cryptocurrency pegged to assets like the U.S. dollar, are under scrutiny. The report asserts that these digital assets fail to consistently maintain their value in parity with their underlying assets, contrary to what their name suggests.
The BIS examined various stablecoins, including Pax Gold, USD Coin (USDC), and Tether (USDT), and cited the notable collapse of Terra’s UST, which had significant repercussions in the cryptocurrency market last year. Stablecoins are often considered a potential alternative payment method due to their theoretically stable value.
However, the BIS report emphasizes that for stablecoins to be effective as a medium of exchange, they must consistently hold their value throughout the trading day, a condition not reliably met according to their findings.
Adding to the concerns, Moody’s Analytics highlighted in a recent article that fiat-backed stablecoins have d
Go to Source to See Full Article
Author: Bralon Hill
Tip BTC Newswire with Cryptocurrency
Donate Bitcoin to BTC Newswire
Donate Bitcoin Cash to BTC Newswire
Donate Ethereum to BTC Newswire
Donate Litecoin to BTC Newswire
Donate Monero to BTC Newswire
Donate ZCash to BTC Newswire
