Pain ahead for algorithmic, non-cash-backed stablecoins: IMF chief
IMF Director Tobias Adrian believes unsecured, algorithm-stabilized stablecoins pose too much of a threat to holders and could undergo new sales.
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The International Monetary Fund (IMF) Capital Markets Director thinks there could be more failed “coin offerings,” including algorithmic stablecoins amid the ongoing crypto winter.
In the interview with Yahoo Finance on July 27, Tobias Adrian, Director of Money and Capital Markets for the IMF, said that there may be further failures of some coin offerings, especially the algorithmic stablecoins:
"We could see further selling, both in crypto assets and in risky asset markets, like stocks...there could be further failures of some of the coin offerings - in particular, some of the algorithmic stablecoins that have been hit the hardest, and there are others that may fail."
The IMF chief also noted on Wednesday that he had seen “some vulnerabilities” for some fiat-backed stablecoins, referring to Tether, which he said is not “one-to-one backed” to the dollar American (USD).
Adrian also mentioned that stablecoins need a “global regulatory approach” to better protect investors. Adrian said that while it would be difficult to assess whether each cryptocurrency is a security or not, regulators should first ensure that crypto exchanges and wallet providers do their due diligence on the parts before marketing them.
Terra USD (UST), now known as TerraClassicUSD, is the most notable algorithmic stablecoin to lose its fixed price, which wiped out $40 billion in market value in May, and is currently priced at $0.04.
Tron's USDD algorithmic stablecoin also fell to $0.91 in June, but regained its flat price after $700 million worth of USDC was dumped
IMF Director Tobias Adrian believes unsecured, algorithm-stabilized stablecoins pose too much of a threat to holders and could undergo new sales.
New
The International Monetary Fund (IMF) Capital Markets Director thinks there could be more failed “coin offerings,” including algorithmic stablecoins amid the ongoing crypto winter.
In the interview with Yahoo Finance on July 27, Tobias Adrian, Director of Money and Capital Markets for the IMF, said that there may be further failures of some coin offerings, especially the algorithmic stablecoins:
"We could see further selling, both in crypto assets and in risky asset markets, like stocks...there could be further failures of some of the coin offerings - in particular, some of the algorithmic stablecoins that have been hit the hardest, and there are others that may fail."
The IMF chief also noted on Wednesday that he had seen “some vulnerabilities” for some fiat-backed stablecoins, referring to Tether, which he said is not “one-to-one backed” to the dollar American (USD).
Adrian also mentioned that stablecoins need a “global regulatory approach” to better protect investors. Adrian said that while it would be difficult to assess whether each cryptocurrency is a security or not, regulators should first ensure that crypto exchanges and wallet providers do their due diligence on the parts before marketing them.
Terra USD (UST), now known as TerraClassicUSD, is the most notable algorithmic stablecoin to lose its fixed price, which wiped out $40 billion in market value in May, and is currently priced at $0.04.
Tron's USDD algorithmic stablecoin also fell to $0.91 in June, but regained its flat price after $700 million worth of USDC was dumped
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