The Central banks are concerned about the widespread introduction of Stablecoins, which threaten the global financial system. Since they make recommendations to regulate or even ban, the crypto market is now facing its biggest threat.
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Brutal for the Bitcoin and crypto-market
In a published yesterday the document, the Financial Stability Board (FSB) presented its concern on stablecoins in the global financial market. Since stable coins “to increase the efficiency of the provision of financial services”, is this a Problem for the Status quo.
A wide distribution would lead, in your opinion, to an independent financial system which is beyond their control. Even Fiat could replace currencies, and “the onslaught of the banks exacerbate”.
The fear of the risks posed by the crypto-market used stable coins for financial stability is confirmed for a long time from countries such as China and France. The French AMF said last week that the EU should create special rules for stable coins, since these “systemic risks” for the Union.
The recommendations go so far that the local authorities should prohibit stablecoins completely, even those that run on a fully decentralised systems such as cryptographic networks like Ethereum.
Crypto market could suffer from a Stablecoin-ban strong
A ban on Stablecoins could be in fact very scary. First of all, it would basically shut down the entire DeFi-movement and projects such as MakerDAO and the Compound completely. Worse, it could trigger to the entire market, a comprehensive liquidity crisis.
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If one considers only stable coins such as Tether (USDT), and TrueUSD (TUSD), both of which are deposited with the U.S. Dollar. For many users around the world Stablecoins when Trading with Bitcoin are of crucial importance.
Many crypto-derivatives platforms use only stable coins like Tether, Binance USD and Paxos dollars. Currently, a billion USDT are in the Binance and this is a positive sign, because it suggests that the Trader Stablecoins send to exchanges to buy crypto-currencies. It seems that many investors are waiting for the right time to shift your Stablecoin-stocks in BTC. But all of this could be stopped, if the recommendations of the FSB to be adopted.
A complete prohibition, which means that gigantic stable coins like Tether to exit the market, could also lead to a mass Exodus of traders and a liquidity crisis, as it has the crypto market never before experienced.
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