Krutika Adani
The European Central Bank has released a working paper questioning the viability of stablecoins for purposes like cross-border payments and stores of value.
As per the bank, Stablecoins are not as safe as they are thought to be
The statement was likely inspired after the US made some changes in its policy rates in the last couple of years.
The bank’s paper added that every time the US raised interest rates, it dented the stablecoin market cap by 10%.
Stablecoins also have threats that emerge from other factors like the FTX collapse, the Terra Luna collapse, and de-peg threats.