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Bank for International Settlements Criticizes Stable Currency

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According to reports, Agustin Carstens, the general manager of the Bank for International Settlements (BIS), which criticized the stable currency, said that th…

Bank for International Settlements Criticizes Stable Currency

According to reports, Agustin Carstens, the general manager of the Bank for International Settlements (BIS), which criticized the stable currency, said that the events in 2022 made people “seriously doubt the ability of the stable currency to play a role as a currency”. The stable currency is a cryptocurrency linked to the value of other assets such as sovereign currency, and cannot benefit from the regulatory requirements and protection applicable to bank deposits.

BIS General Manager: The events in 2022 raised “serious doubts” about the stable currency as a currency

Interpretation of the news:


The Bank for International Settlements (BIS), represented by its general manager Agustin Carstens, has criticized the use of stable currency, a type of cryptocurrency linked to the value of other assets. Carstens claimed that recent events in 2022 have caused people to “seriously doubt the ability of the stable currency to play a role as a currency.”

Stable currency, also known as stablecoin, was created as a solution to the volatility of traditional cryptocurrencies like Bitcoin. Stablecoins are pegged to the value of other assets such as sovereign currency, gold or other cryptocurrencies. This link to other assets is meant to provide stability and reduce volatility. However, this also means that stablecoins do not benefit from the regulatory requirements and protection applicable to bank deposits, which can expose users to significant risks.

Carstens’ statement suggests that the perceived stability of stablecoins may not be as solid as initially assumed, and that recent events may have triggered increased skepticism about them. This may be due in part to concerns about the value of the assets to which stablecoins are pegged or about the reliability of the technology behind stablecoins.

The BIS is an organization owned by 63 central banks around the world, which aims to promote international monetary and financial stability. As such, the BIS’s opinion on stablecoin carries significant weight in the financial industry.

Despite the criticisms, stablecoin continues to attract interest and investment. In fact, the market capitalization of stablecoins has notably increased in recent years.

In conclusion, the BIS announcement underscores that stable currency may not perform as effectively as traditional fiat currencies. Therefore, investors and users of the cryptocurrencies should exercise caution while using such digital currencies.

To sum up, the Bank for International Settlements’ criticism of stable currency raises legitimate concerns about the reliability and potential risks of this cryptocurrency. Investors and users should factor these concerns into their decision-making when dealing with stablecoin.

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