(ANSA) – ROME, JUL 24 – Bank of Italy Deputy Director General Chiara Scotti on Thursday sounded the alarm about the risks posed by crypto assets in general, and stablecoins in particular.
A stablecoin is a type of cryptocurrency whose value is supposed to be pegged to, and collateralized by, a reference asset, which can be fiat money or another cryptocurrency.
“If not properly regulated, stablecoins can pose significant risks to financial stability, market integrity, consumer protection and the smooth functioning of the payments system,” Scotti told the Parliamentary Commission of Inquiry into the Banking, Financial and Insurance System.
“In the event of loss of confidence in the ability of a specific stablecoin to maintain its anchor, panic phenomena could be generated among users, with a rush to cash in”.
Scotti also stressed the possible use of stablecoins “for illicit purposes” to disguise the origin of financial resources for activities such as money laundering and the circumvention of sanctions. (ANSA).
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A stablecoin is a type of cryptocurrency whose value is supposed to be pegged to, and collateralized by, a reference asset, which can be fiat money or another cryptocurrency.
“If not properly regulated, stablecoins can pose significant risks to financial stability, market integrity, consumer protection and the smooth functioning of the payments system,” Scotti told the Parliamentary Commission of Inquiry into the Banking, Financial and Insurance System.
“In the event of loss of confidence in the ability of a specific stablecoin to maintain its anchor, panic phenomena could be generated among users, with a rush to cash in”.
Scotti also stressed the possible use of stablecoins “for illicit purposes” to disguise the origin of financial resources for activities such as money laundering and the circumvention of sanctions. (ANSA).
Read article…
