“It’s High Time Europe Has A CBDC” Says EU Regulators
EU authorities are pointing to the assault on UST and the stuttering performance of USDT as evidence that Europe should have a CBDC.
The volatility that was caused by the assault on the stablecoin, UST, is seen by many people as a justification to enhance the supervision of stablecoins. It is difficult to dispute the requests for more robust security for investors, given the rapid depletion of UST worth over $16 billion within only a few days.
At this time, the attacker that targeted the UST cannot be identified. Also, there are a lot of speculations but no concrete proof to imply that the government or other institutions were involved. However, one thing that all of these hypotheses have in common is that the objective was to deliberately sow chaos in the stablecoin marketplace to expedite the introduction of CBDCs.
US And UK Officials Call For Regulation Of Stablecoins
Throughout the crisis, Janet Yellen presented testimony in front of a committee of the United States Treasury. Also, the United Kingdom Treasury repeated its willingness to regulate the release and usage of stablecoins. Now, the EU is throwing its hat into the ring. The head of the European Central Bank (ECB), who is also in charge of designing a European CBDC, Fabio Panetta, was quoted as saying,
“Recent events in the crypto market demonstrate it is a fallacy to imagine that private instruments may operate as actual money when they cannot be exchanged for regular fiat easily. There is no assurance that stablecoins can ever be redeemed for their original value at any point in time; in fact, just the previous week, the most widely used stablecoin in the world momentarily lost its anchor to the dollar.”
The fact that no currency has been able to make significant progress in this field is a compelling justification for taking a cold stance toward crypto-backed stablecoins.
Over 99% of all stablecoins that are now in circulation use the United States Dollar (USD) as their backing, as opposed to the British Pound, the Euro, or any of the other many fiat currencies.
The continued coverage in conventional media considers the effects that Bitcoin may have on the natural world and the advantages of using proof of stake rather than proof of work.
Every CBDC research that has been made public emphasizes on a proof-of-stake mechanism that requires just a small amount of energy. Panetta continued by saying that introducing a digital euro “will only be effective if prospective consumers think that it offers value to existing payment alternatives.”