Stablecoins need stricter regulation than other altcoin projects, as they have the potential to undermine financial stability, according to a report by the Bank of Korea (BoK) on Monday. Here are the details.
These altcoin projects could undermine financial stability
Bank of Korea argues that stablecoins should be studied separately from other cryptocurrencies. According to the presented report, stablecoins have the potential to undermine financial stability. BoK’s report reflects the concerns of jurisdictions around the world that are preparing proposals to regulate stablecoins.
The report argues that stablecoin issuers should have minimal capital and reserve assets in order to minimize the possibility of transferring the risks of digital assets to the payment and settlement system. Bank of Korea also said that crypto-asset businesses must be registered, authorized to operate, and subject to regular external audits.
The report stated that the issuance structure of cryptocurrency should be regulated by a special law as the market system is different from securities and fiat currencies, making it difficult to respond to current regulations. The country’s politicians are trying to establish a comprehensive regulatory framework for crypto assets. As we reported on cryptokoin.com, the May collapse of South Korean stablecoin issuer Terraform Labs prompted the country’s policymakers and lawmakers to scrutinize the local crypto industry.
Tether (USDC) maintains its lead as the most used stablecoin
In the developing crypto money market, the coins indexed to any fiat currency that do not have price movement volatility are stablecoins. The first stablecoin is USDT(Tether) and was launched in 2014. When we look at the market volume, we can see that the most used stable coin project is USDT (Tether). Just behind it, USDC (Usd Coin) comes in second place. The price volatility of stable coins should remain constant, so assets with a fixed value should be used for the price index. Although the stablecoin index is generally based on the US dollar, there are stablecoins indexed to other assets such as euro and gold in the crypto money market. Or there are stablecoins indexed to crypto assets such as DAI.
After Tether and USDC, among the best stablecoins by market cap; Binance USD, Dai, Paxdollar, TrueUSD, USDD and Gemimi Dollar are available. Although it is generally the same currency as the currency that stablecoins are indexed to, sometimes minor fluctuations may occur. The reason for this is the price volatility in the market. Apart from stable coins indexed to fiat assets, there are stable coins that are not indexed to any value. These stablecoins are called unsecured stablecoins or algorithmic stablecoins.
Contact us to be instantly informed about the last minute developments. twitter‘in, Facebookin and InstagramFollow and Telegram and YouTube join our channel!
Risk Disclosure: The articles and articles on Kriptokoin.com do not constitute investment advice. Bitcoin and cryptocurrencies are high-risk assets, and you should do your own research and due diligence before investing in these currencies. You can lose some or all of your money by investing in Bitcoin and cryptocurrencies. Remember that your transfers and transactions are at your own risk and any losses that may occur are your responsibility. Cryptokoin.com does not recommend buying or selling any cryptocurrencies or digital assets, nor is Kriptokoin.com an investment advisor. For this reason, Kriptokoin.com and the authors of the articles on the site cannot be held responsible for your investment decisions. Readers should do their own research before taking any action regarding the company, assets or services in this article.
Disclaimer: Advertisements on Kriptokoin.com are carried out through third-party advertising channels. In addition, Kriptokoin.com also includes sponsored articles and press releases on its site. For this reason, advertising links directed from Kriptokoin.com are on the site completely independent of Kriptokoin.com’s approval, and visits and pop-ups directed by advertising links are the responsibility of the user. The advertisements on Kriptokoin.com and the pages directed by the links in the sponsored articles do not bind Kriptokoin.com in any way.
Warning: Citing the news content of Kriptokoin.com and quoting by giving a link is subject to the permission of Kriptokoin.com. No content on the site can be copied, reproduced or published on any platform without permission. Legal action will be taken against those who use the code, design, text, graphics and all other content of Kriptokoin.com in violation of intellectual property law and relevant legislation.