The Risk of Banks for Stable Currency Supported by Legal Currency
On March 12, CZ, the founder of Binance, said on the social platform that the bank is a risk for the stable currency supported by the legal currency. In response to netizens’ comments that we need crypto support, we replied that Do Kwon was actually right, but failed miserably in implementation.
CZ: Bank’s risk to stable currency supported by legal currency
Analysis based on this information:
The founder of Binance, CZ, spoke about the risks that banks pose on stable currency supported by the legal currency on March 12, 2021. CZ discussed this on a social platform, where he addressed netizens’ comments regarding the need for crypto support in the financial industry. According to CZ, banks pose a significant risk to the stability of currency, particularly in the wake of the recent pandemic that has affected many economies globally.
CZ’s comments suggest that banks may not be the best support for stable currency given their inability to withstand major economic upheavals such as the pandemic. Despite banks being some of the most relied-upon financial institutions globally, CZ’s statement implies that their reliability only extends to a certain extent and that other alternatives should be considered. He further suggests that it may be necessary to complement bank support with cryptocurrency to stabilize the legal currency.
In response to the comments of netizens requesting for crypto support, CZ agreed that they were right but regrettably, Do Kwon, who had earlier proposed the idea, failed in implementing it. While CZ did not elaborate on the reasons for Do Kwon’s failure, it is clear that the idea of crypto support for stable currency is not an entirely new concept. However, its implementation may pose some challenges.
The advantages that come with stable currency supported by legal tender are clear, but CZ’s remarks suggest that these benefits are susceptible to external risks such as pandemics. As such, it may be necessary to think beyond banks and explore alternative strategies to secure and stabilize legal currency throughout difficult periods. The inclusion of cryptocurrency, according to CZ, could be one such approach to achieve this objective.
In conclusion, CZ’s statement about banks as a risk to stable currency supported by legal currency is a fascinating and thought-provoking discussion. While cypto support for legal currency may be a helpful alternative, its full implementation head-on may need to address cyber security, financial regulations, as well as the broader financial system’s long-term stability.
Overall, the discourse of stabilizing economies and legal currencies is healthy for economic growth, but how stable currency will be supported is an ongoing and critical discussion within the field of finance.
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References:
Ritholtz, B., Ezra Klein, 1.10.21, Why Crypto Is Coming Out of the Shadows, bloomberg.com.
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