New Zealand Reserve Bank Governor Adrian Orr issued a stern caution regarding cryptocurrencies, with a particular focus on stablecoins.
Adrian Orr, the Governor of the Reserve Bank of New Zealand, issued a stern caution regarding cryptocurrencies, particularly stablecoins, emphasizing that they cannot supplant traditional fiat currency.
The Governor of the Reserve Bank of New Zealand criticizes stablecoins as an ‘oxymoron’.
Speaking to a parliamentary committee in Wellington today, Orr described stablecoins as “the biggest misnomer” and “oxymorons”. “He emphasized that stablecoins are not stable. They are only as good as the balance sheet of the person offering that stablecoin,” he said.
Stablecoins, tethered to other assets, require substantial reserves to uphold their stability. However, they remain susceptible to issues within traditional finance, raising concerns over their potential to disrupt real-world markets. New Zealand Reserve Bank Governor Adrian Orr expressed apprehensions about sovereign digital currencies impacting the global financial system, noting discrepancies between advertised features and actual functionalities. Regarding Bitcoin, Orr emphasized its limitations, asserting it’s neither a medium of exchange, a store of value, nor a unit of account, and cannot replace central bank money. He underscored the importance of fiat currencies, like the New Zealand dollar, supported by parliamentary backing and reliable institutions to ensure consistent low inflation.
