• Latest
Stablecoin Crisis Could Wreck Global Finance, Fed Warns in New Report

Stablecoin Crisis Could Wreck Global Finance, Fed Warns in New Report

November 15, 2019
ygg sea surpasses 10,000 scholarships in just six months of launch

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

May 6, 2022
mintable launches industry changing gas free minting service on ethereum

Mintable Launches Industry Changing Gas Free Minting Service on Ethereum

May 1, 2022
5 projects enabling smart contract development on bitcoin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022
bitcoin atm installed in mexico's senate building

Bitcoin ATM installed in Mexico’s Senate Building

April 27, 2022
cross chain services play a crucial role in facilitating continued adoption of defi applications

Cross-Chain Services Play a Crucial Role in Facilitating Continued Adoption of DeFi Applications

April 26, 2022
justin sun launches usdd, integrating the blockchain world and the real world with the decentralized stablecoin

Justin Sun Launches USDD, Integrating the Blockchain World and the Real World with the Decentralized Stablecoin

April 25, 2022
nfts: the next musical revolution

NFTs: The Next Musical Revolution

April 24, 2022
things you should know before investing in nfts

Things You Should Know Before Investing in NFTs

April 24, 2022
what are wrapped tokens?

What Are Wrapped Tokens?

April 23, 2022
what is the future of ethereum (eth)?

What is the future of Ethereum (ETH)?

April 22, 2022
green gaming

Everything You Need to Know About Play-to-Earn on Algorand in 2022

April 21, 2022
$ape going bananas as rumors of upcoming land sale of bayc metaverse gather momentum

$APE Going Bananas As Rumors of Upcoming Land Sale of BAYC Metaverse Gather Momentum

April 21, 2022
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
CoinNewsDaily
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining
No Result
View All Result
CoinNewsDaily
No Result
View All Result
Home Business

Stablecoin Crisis Could Wreck Global Finance, Fed Warns in New Report

coinnewsdaily by coinnewsdaily
November 15, 2019
in Business
0
Stablecoin Crisis Could Wreck Global Finance, Fed Warns in New Report
190
SHARES
1.5k
VIEWS
Share on FacebookShare on Twitter

Related articles

ygg sea surpasses 10,000 scholarships in just six months of launch

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

May 6, 2022
5 projects enabling smart contract development on bitcoin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022

The U.S. Federal Reserve Board on Friday warned that a stablecoin crisis could wreak havoc on the global economy and outlined the steps issuers must take to protect the status quo. 

The central bank’s prognosis – buried deep in the November edition of its semiannual “Financial Stability Report” – rests on a stablecoin worst case outcome: a run on the issuers, in which coin holders panic en-masse and demand the return of the fiat they staked. 

Stablecoins are a form of cryptocurrency that maintain their value by staking themselves to fiat reserves. While the volatility of bitcoin, the most widely-owned cryptocurrency, is a favorite talking point of its detractors, stablecoins are digital currencies backed 1:1 with a fiat asset or basket of currencies, and designed to maintain a steady value.

The report’s concern is that something could go wrong with the way the stablecoin works – be it, with operations, liquidity, or credit. “This loss of confidence could lead to a run,” it said.

“In an extreme scenario, holders may be unable to [liquidate], with potentially severe consequences for domestic or international economic activity, asset prices, or financial stability.”

Since the fraught launch of the Libra stablecoin concept in June, the Fed Governors, along with U.S. regulators and counterparts abroad, have been sounding alarm bells. Beyond the digital currency question, the integration with mass consumer social network could be disastrous, the report warns.

“Stablecoin initiatives that are built on existing large and cross-border customer networks, such as Facebook’s Libra, have the potential to rapidly achieve widespread adoption,” the report said, echoing comments made by Fed Governor Lael Brainard last month. 

But now condensed into a single document, the report consolidates and formalize regulators’ concerns and notes the steps required to prevent a stablecoin catastrophe. 

The Fed’s report said:

  • Issuers must disclose how their staking mechanism works
  • Issuers must protect customer data privacy while maintaining KYC records to prevent illicit use
  • Issuers must disclose their terms of service
  • Issuers must inform customers if they have any rights to the underlying asset

“As the Group of Seven has noted, ‘no global stablecoin project should begin operation until the legal, regulatory and oversight challenges and risks outlined [in this report] are adequately addressed, through appropriate designs and by adhering to regulation that is clear and proportionate to the risks.’”

Federal Reserve image via Shutterstock

Credit: Source link

Tags: BusinessCryptoCrypto Business
Share76Tweet48
Previous Post

Tether to File Motion With NYAG to Dismiss Class Action Lawsuit

Next Post

Criminal Case Against Failed WEX Crypto Exchange Points at Russian Law Enforcement

coinnewsdaily

coinnewsdaily

CoinNewsDaily.com is an online Crypto Coin News Website that aims to provide latest trendy news from market and around the world.

Related Posts

ygg sea surpasses 10,000 scholarships in just six months of launch
Alt Coin

YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch

May 6, 2022
5 projects enabling smart contract development on bitcoin
Alt Coin

5 Projects Enabling Smart Contract Development on Bitcoin

April 29, 2022
cross chain services play a crucial role in facilitating continued adoption of defi applications
Alt Coin

Cross-Chain Services Play a Crucial Role in Facilitating Continued Adoption of DeFi Applications

April 26, 2022
justin sun launches usdd, integrating the blockchain world and the real world with the decentralized stablecoin
Alt Coin

Justin Sun Launches USDD, Integrating the Blockchain World and the Real World with the Decentralized Stablecoin

April 25, 2022
what are wrapped tokens?
Bitcoin

What Are Wrapped Tokens?

April 23, 2022
what is the future of ethereum (eth)?
Alt Coin

What is the future of Ethereum (ETH)?

April 22, 2022
Load More
Next Post
Criminal Case Against Failed WEX Crypto Exchange Points at Russian Law Enforcement

Criminal Case Against Failed WEX Crypto Exchange Points at Russian Law Enforcement

Categories

  • Alt Coin
  • Bitcoin
  • Business
  • Ethereum
  • ICO
  • Litecoin
  • Mining
  • NFT
  • Ripple
  • Tech
  • Trading

What New here?

  • YGG SEA Surpasses 10,000 Scholarships in Just Six Months of Launch
  • Mintable Launches Industry Changing Gas Free Minting Service on Ethereum
  • 5 Projects Enabling Smart Contract Development on Bitcoin

Subscribe to Get More!

Loading
  • About Us
  • Contact Us
  • Privacy & Policy

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev

No Result
View All Result
  • Home
  • Coin Market Cap
  • Bitcoin
  • Ethereum
  • Ripple
  • Litecoin
  • Alt Coin
  • Business
  • Trading
  • Mining

© 2018-2021 CoinNewsDaily.com by CoinNewsDaily Inc. Crafted with Love by iFtiDev

  • bitcoinBitcoin(BTC)$23,865.00-0.72%
  • ethereumEthereum(ETH)$1,773.191.66%
  • tetherTether(USDT)$1.000.04%
  • binancecoinBNB(BNB)$324.37-1.74%
  • rippleXRP(XRP)$0.378097-0.46%
  • cardanoCardano(ADA)$0.53-2.97%
  • SolanaSolana(SOL)$42.40-1.15%
  • polkadotPolkadot(DOT)$9.12-1.62%
  • dogecoinDogecoin(DOGE)$0.0728332.54%
  • Shiba InuShiba Inu(SHIB)$0.000012-0.54%
  • daiDai(DAI)$1.00-0.15%
  • matic-networkPolygon(MATIC)$0.92-1.69%
  • tronTRON(TRX)$0.0710610.42%
  • ethereum-classicEthereum Classic(ETC)$37.69-2.71%
  • OKBOKB(OKB)$18.40-0.65%
  • leo-tokenLEO Token(LEO)$4.80-1.62%
  • litecoinLitecoin(LTC)$62.30-0.76%
  • FTXFTX(FTT)$31.440.36%
  • chainlinkChainlink(LINK)$8.570.29%
  • CronosCronos(CRO)$0.1521150.78%
  • cosmosCosmos Hub(ATOM)$11.73-0.19%
  • algorandAlgorand(ALGO)$0.41360312.16%
  • moneroMonero(XMR)$166.66-0.51%
  • stellarStellar(XLM)$0.117536-7.57%
  • bitcoin-cashBitcoin Cash(BCH)$142.96-3.15%
  • vechainVeChain(VET)$0.031618-2.21%
  • filecoinFilecoin(FIL)$8.70-5.36%
  • Internet ComputerInternet Computer(ICP)$8.26-2.15%
  • tezosTezos(XTZ)$1.90-1.77%
  • theta-tokenTheta Network(THETA)$1.59-4.85%
  • ElrondElrond(EGLD)$65.48-2.91%
  • AaveAave(AAVE)$101.96-3.17%
  • eosEOS(EOS)$1.25-1.85%
  • bitcoin-cash-svBitcoin SV(BSV)$62.46-1.58%
  • makerMaker(MKR)$1,129.29-1.64%
  • zcashZcash(ZEC)$76.827.80%
  • iotaIOTA(MIOTA)$0.344557-2.19%
  • havvenSynthetix Network(SNX)$3.97-4.56%
  • paxos-standardPax Dollar(USDP)$1.00-0.52%
  • neoNEO(NEO)$11.62-1.57%
  • huobi-tokenHuobi(HT)$4.41-0.26%
  • basic-attention-tokenBasic Attention(BAT)$0.4474050.53%
  • zilliqaZilliqa(ZIL)$0.045371-1.98%
  • PancakeSwapPancakeSwap(CAKE)$4.44-3.18%
  • dashDash(DASH)$56.893.46%
  • wavesWaves(WAVES)$6.13-2.33%
  • KusamaKusama(KSM)$64.49-1.71%
  • bitcoin-goldBitcoin Gold(BTG)$29.40-1.57%
  • nemNEM(XEM)$0.052172-0.78%
  • qtumQtum(QTUM)$4.18-1.76%
  • CompoundCompound(COMP)$62.70-2.39%
  • yearn-financeyearn.finance(YFI)$11,401.81-2.10%
  • Elrond ERDElrond ERD(ERD)$0.0259290.00%
  • omisegoOMG Network(OMG)$2.452.02%
  • ethlendAave [OLD](LEND)$4.103.48%
  • SushiSushi(SUSHI)$1.54-1.52%
  • golemGolem(GLM)$0.274220-0.01%
  • ontologyOntology(ONT)$0.288329-2.27%
  • digibyteDigiByte(DGB)$0.0138329.41%
  • umaUMA(UMA)$3.06-0.80%
  • UniswapUniswap(UNI)$2.4438.80%