Wellington, New Zealand – New Zealand’s central bank governor, Adrian Orr, has issued a strong warning about cryptocurrencies, particularly stablecoins, stating they are not a reliable alternative to traditional fiat currencies. During a parliamentary committee meeting on February 12, 2024, Orr called stablecoins “the biggest misnomers” and “oxymorons,” highlighting concerns about their stability and potential risks.
Key points from Orr’s statement:
- Stablecoin stability questioned: Orr emphasized that stablecoins, despite their name, are not guaranteed to be stable. He stated their value ultimately depends on the financial strength of the entity issuing them, raising concerns about potential vulnerabilities.
- Bitcoin’s limitations: Orr also addressed Bitcoin, another popular cryptocurrency, stating it currently lacks the characteristics of a reliable medium of exchange, store of value, or unit of account. He acknowledged its other purposes but stressed it’s not a substitute for central bank money.
- Fiat currency’s foundation: Orr emphasized the unique advantages of fiat currencies, backed by the power of parliament and credible central banks ensuring low and stable inflation. This, he argued, sets them apart from cryptocurrencies with inherent risks.
- Regulatory concerns: Orr expressed concerns about the potential risks associated with cryptocurrencies, particularly regarding consumer protection and financial stability. He emphasized the need for appropriate regulations to mitigate these risks.
Overall, Orr’s comments reflect growing concerns among central banks worldwide regarding the potential risks posed by cryptocurrencies. His statement highlights the importance of responsible innovation and regulatory frameworks to ensure financial stability and consumer protection in the evolving digital asset landscape.
It’s important to note that this news does not represent a blanket condemnation of all cryptocurrencies. However, it highlights the need for careful consideration and informed decision-making before investing in such assets.
- Bloomberg: https://www.bloomberg.com/news/articles/2024-02-12/new-zealand-central-banker-slams-stablecoins-as-oxymorons
- BNN Bloomberg: https://www.bnnbloomberg.ca/new-zealand-central-banker-slams-stablecoins-as-oxymorons-1.2033623
Please note: This news summary was written on February 12, 2024, based on the available information at the time. It’s important to stay updated on developments in this fast-evolving field by consulting reliable sources.
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