Nobel Prize winner economist Jeans would have warned against bad supervision of stablecoins.
In a interview With the Financial Times (FT) published Tuesday, September 2, Tirole said that it was “very, very worried” of the surveillance of the stable and the possibility of a gain of depositors supplied by doubts on the reserve assets to which the digital tokens have been fixed.
As the FT notes, Stablecoins should increase in popularity following new American regulations allowing banks to introduce their own coins. The global use of Stablecoins is climbed to around $ 280 billion.
Although they can be considered by retail users as “a perfectly safe deposit”, the stablecoins could become a source of losses and lead to calls for expensive remedies led by the government, said Tirole, which received the Nobel Prize for the economy in 2014.
He also warned that support for stablescoins with the US government’s obligations could become unpopular due to the relatively low yields of underlying assets, highlighting the previous cases where treasury debt returns were “negative for a number of years” and payments after inflation were even lower.
Stablecoin transmitters could thus be taken in the “temptation” to invest in different assets which “have higher yields and are more risky,” said FT Tirole.
Writing on the growing popularity of Stablecoins last week, Pymnts noted a larger structural challenge facing the assets.
“The Stablecoins always praise a space in a trilem of confidentiality, compliance and transaction debit. Innovations such as zero knowledge of knowledge and KYC compatible pools offer partial relief, but the scale and interoperability remain constraints, ”according to this report.
Less a breakthrough, increasing and targeted deployments could be the most viable path, added Pymnts, stressing that the stablecoins have gone from “speculative experience” to fundamental utility.
“The question of whether the stablecoins evolve in a system of trusted rails or an edifying flash remains to be seen, but the plumbing is more important than the yield, and the infrastructure defines viability,” said the report.
Also last week, Pymnts examined among the concerns in the banking world concerning the law on engineering, which governs stablecoins.
The legislation is written in a way that could allow customers to gain interest via an escape, opening the door to the exchanges of crypto, and not transmitters to indirectly offer interest and rewards to the holders of ecunines issued by companies like Circle or Tether.
“The argument of the banking sector has been frank: if stablecoin issuers are starting to pay interest, the Americans could abandon bank deposits in search of better return,” said this report.
“The spectrum of the flight of deposit is that which the lobbyists of banks know resonates with regulators and legislators, in particular in a post-Silicon Valley banking environment where trust in banking stability remains fragile.”
