While analysts in the crypto market show increased optimism towards stablecoins, Hyun Song Shin, director at the Bank for International Settlements (BIS), highlights two major issues with them. The first is the lack of widespread use as a currency, and the second is the increasing costs borne by users.
Stablecoins, cryptocurrencies linked to stable assets, are used in trading and payments, but Shin warns that they fail to fulfill the social function of money. Although the optimism in the market is evident, with a capitalization of over 310 billion dollars, Shin suggests that these assets are not a viable long-term solution. In contrast, industry analysts believe that stablecoins are becoming essential for value transfer in the digital economy, with a significant increase in transactions. Recent regulations, such as MiCA in the EU and the GENIUS Act in the US, have boosted confidence in stablecoins, which further solidifies their role in the global financial infrastructure.
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