ECB: Stablecoins Are an Unsuitable Means of Payment
According to the report of the ECB on financial stability, stablecoins are impractical as a payment method, and their current form is not suitable for use in the real economy.
The bank’s analysts have concluded that the lack of regulatory oversight and the collapse of some algorithmic stablecoins like TerraUSD point to the contagion effects that such assets can cause in the financial system.
Per the report:
“The largest ‘stablecoins’ perform a critical liquidity function. This could have wide-ranging implications for digital asset markets if there is a disruption or loss of trust.”
The ECB has considered the use of stablecoins as a means of payment “impractical.” The speed and cost, as well as the conditions for their conversion, “are inadequate for use in payments in the real sector of the economy,” the specialists noted.