Stablecoin or Cryptocurrency: Both Digital Currencies a Threat To Central Banks

Stablecoins are potentially one of the most popular use cases of blockchain technology after ‘utility coins.’ Utility tokens are primarily created out of thin air or mined by spending electricity or value, whereas A ‘real world’ asset backs Stablecoins. The US Dollar backs the most popular stablecoins.

At the initial stage, the stablecoins were introduced on cryptocurrency Exchange sites to facilitate storing of value digitally. Moreover, now the central bank issued coins like JPM Coin and Facebook's Globalcoin are adopting the same technology to implement stablecoins only. Agustin Carstens, General Manager for Bank of International Settlements, wrote in a blog post:

"Central bank digital currencies could bring profound changes to the financial system, potentially crowding out commercial banks. They could also change the way monetary policy operates. The implications for monetary and financial stability need careful consideration."

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