JAKARTA – Officials at the British central bank, the Bank of England (BoE) recently criticized crypto stablecoins whose prices are tied to fiat currencies. On the other hand, the collapse of stablecoin TerraUSD (UST) received criticism from various circles including the crypto industry and central banks.
According to BoE executive director Andrew Hauser, the stablecoins UST and USDT Tether are not suitable for widespread consumer use. In remarks to a panel convened by the Federal Reserve of New York, Hauser made his criticisms.
According to him, UST and USDT do not provide sufficient real-time data on their value and details on how they manage to maintain convertibility to fiat. “They (stablecoins) are unstable,” said Hauser.
He then warned stablcoin digital asset holders to be aware of the possibility of large financial losses caused by the crypto.
Meanwhile, the BoE itself began to tighten crypto regulations in the UK. The central bank considers that digital assets pose an increased risk to the global financial system. Today the crypto market is worth 1.7 trillion US dollars, an amount larger than when subprime mortgages collapsed in 2008.
Furthermore, Hauser revealed that it will keep an eye on high-growth stablecoins. The BoE tightens scrutiny after the collapse of TerraUSD whose price is detached from the US dollar bond.
"Buyers beware, the warning may be sufficient for coins that are only used specifically, but not enough for coins that reach a systemic scale," he stressed. The BoE itself plans to add a hundred staff to tighten supervision of the crypto market.
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