March 28, 2024

The head of the Central Bank of Australia Philip Lowe: stablecoins are better than state digital currencies

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The head of the Central Bank of Australia Philip Lowe: stablecoins are better than state digital currencies

The leadership of the Central Bank of Australia believes that stablecoins can be more effective and preferable than digital currencies issued by the Central Bank.

Phillip Lowe during the paneldiscussion at a meeting of G20 financial officials in Indonesia said consumer-facing digital assets issued by private companies could be better than tokens issued by a central bank.

“I tend to think that a private solution would be better - if we can get the regulatory mechanisms right in the stablecoin market,” Lowe said.

The official believes that it is impossible to use stablecoins on a global scale without proper oversight:

“If these tokens are to be widely used by the community, they should be government-backed or regulated in the same way we regulate bank deposits.”

Hong Kong Monetary Authority chief Eddie Yue(Eddie Yue) said in response to a colleague that greater scrutiny of stablecoins could help reduce the risks of decentralized finance (DeFi) projects that are part of the cryptocurrency ecosystem:

"Despite the Terra-Luna incident, I thinkthat cryptocurrencies and DeFi are here to stay – although they may be contained as the technology and innovation behind these developments are likely to be important to our future financial system.”

During a discussion at the G20 meetingLow, Yue and other participants agreed that more needs to be done to create an international system for regulating stablecoins and the crypto industry as a whole.

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In May, the consumer protection groupChoice from Australia called for the introduction of regulation of the cryptocurrency market in the country as quickly as possible to ensure the protection of users.