Home / Business / Boston Fed chairman said: Stablecoin’s ‘exponential growth’ could ‘destroy’ the money market Fox News

Boston Fed chairman said: Stablecoin’s ‘exponential growth’ could ‘destroy’ the money market Fox News

Eric Rosengren, President of the Federal Reserve Bank of Boston, discussed stablecoin in a recent presentation on June 25. Rosengren stressed that stablecoin could be a “disruptor” for prime money market funds, and Boston Fed chairman noted that the “disruptive force” of the Boston Fed. Stablecoin’s Exponential Growth Is Relevant

Rosengren: ‘We Should Be A Little Worried About Fast Growing Stablecoin Market’

Members of the Federal Reserve are quite aware of stablecoins and the huge market these pegged assets have created. Today’s statistics show that stablecoin is worth $111 billion. Among the huge list of tokens of this type

out of all that money On Sunday, June 27, stablecoin trade volumes were reported to be worth $63 billion of $96 billion on recorded crypto exchanges around the world. Boston Fed Chairman Eric Rosengren noticed this growth And bankers think it could create problems for the money market in the short term.

Boston Fed Chairman Says Tether and Stablecoins Could Destroy Money Markets
The chart above is from the Boston Fed presentation slideshow during his keynote speech. “Financial Stability,” written by Boston Federal Reserve Chairman Eric Rosengren.

During the presentation of the name “Financial Stability” Rosengren highlighted the stablecoin market as a “periodic disruption of the short-term credit market,” Boston Fed Chairman said, referring to inflation and the U.S. real estate market.

Rosengren discussed stablecoin and Tether (USDT) with Yahoo Finance reporter Brian Cheung. After the presentation, Cheung asked Boston Fed chairman, “Those stablecoin financial stability risks, unlike Tether only, are high enough. As if the Fed will allow it to play a historical role as a back stopper?”

“The reason I talk about linking and [stablecoins] is if you look at their portfolio. It basically looks like a portfolio of prime money market funds. But it could be more risky,” Rosengren answered Cheung’s question. “We actually have a stable coin that suffered financial difficulties last week. As you highlighted, Tether has a number of assets. which during the epidemic The spread is quite wide on those assets. The Fed intervenes to ensure the short-term credit market continues,” Rosengren added. Boston Fed Chairman continued:

And why should we be a little worried about stablecoins? [markets] I mean, it’s growing very quickly. So there is exponential growth in stablecoins. Prime money market funds are gradually declining as people look for a less risky way to hold their transaction accounts, and many have moved to government money market funds.

Rosengren emphasized the need to start thinking carefully about what happens to things like stablecoins.

Rosengren said central banks and regulators needed to “Think more broadly” about the types of things that could disrupt the short-term credit market. “Stablecoins, of course, are a component,” said Boston Fed chairman.

Boston Fed Chairman Says Tether and Stablecoins Could Destroy Money Markets
Blockstream CSO Samson Mow tweeted in support of tether (USDT) and stablecoins impacting financial markets.

Cheung asked further. “If the Fed is going to back those markets if they experience stress. Will the financial security risks from this type of product arise again? Rosengren replied that he thought the regulations should change more often. So officials don’t have to come back and do things like this every decade.

“I am concerned that the stablecoin market, which is currently relatively unregulated as it grows and becomes an increasingly important sector of our economy,” Rosengren emphasized. Quickly run away from these kinds of tools,” he added. Rosengren added:

Just as money market funds cause bad disruptions in the credit market. I think future financial stability problems can arise if we don’t start to think carefully about what happens to things like stablecoin the next time we have bad market problems.

Tether (USDT) is the largest stablecoin to date and is worth $62 billion. Behind tether is usd coin (USDC), a stablecoin issued and maintained by Circle USDC with a value of $25.8 billion and between USDT and USDC. Together, the two stablecoins accounted for 79% of the total stablecoin market capitalization of $111 billion.

What do you think about Rosengren’s remarks about tether and stablecoin? Let us know what you think about it in the comments section below.

tags in this

Boston Branch, Boston Fed, Boston Fed Chair, Federal Reserve Boston, Circle, Tamper, Economics, Eric Rosengren, Federal Reserve, Money Market, Samson Mow, Stable Market Cap, Stablecoins, Tether, Tether (USDT), Coins usd, USDC, USDT

photo credit: Shutterstock, Pixabay, Wiki Commons, Boston Fed, Twitter,

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