- New Zealand’s central bank governor has warned about stablecoins.
- The governor spoke at a parliamentary committee on Monday.
- The governor also took a jab at Bitcoin.
The Reserve Bank of New Zealand has raised serious concerns about the viability of digital assets, particularly stablecoins, as a substitute for fiat money.
Stablecoins are alternatives to traditional money when switching between volatile cryptocurrencies. Their prices are typically stable and backed by substantial reserves. However, according to the governor of New Zealand’s central bank, this is just a misconception.
New Zealand Central Banker “Debunks” Stablecoins
Per a Bloomberg report, while addressing a parliamentary committee in Wellington on February 12, New Zealand’s central bank governor, Adrian Orr, slammed stablecoins, noting that they cannot replace traditional money.
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“Stablecoins are ‘the biggest misnomers’ and ‘oxymorons,’” Orr stated. “Stablecoins are not stable. They’re only as good as the balance sheet of the person offering that stablecoin. Mostly in that what is advertised on the tin is not what is in the tin for these purported alternatives to central bank cash.”
The governor reiterated that central banks worldwide are concerned that independent stablecoins could undermine the global financial system.
As for Bitcoin, Orr stated that the cryptocurrency doesn’t qualify as a means of exchange, a store of value, or a unit of account, “yet people try to use it as that.” He explained that BTC could be used for any other purpose but as a compliment to central bank money.
In final remarks, Orr reminded the committee that fiat currencies existed because they had the backing of parliament and a “credible institution such as an independent central bank” to maintain low and stable inflation.
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Read about stablecoin issuer Tether’s Q4 report:
Tether Q4 Report: How It Surpassed Community Expectations
Stay updated on why Solana stablecoins volumes are not fully genuine:
Solana Stablecoins Volumes Are Not Fully Genuine. Here’s Why.
