- New Zealand central bank governor Andrian Orr has chastised stablecoins as “the biggest misnomers” and “oxymorons.”
- The Governor adds that the stablecoins do not always remain stable and are vulnerable to the downfall of the traditional financial system.
- As per his words, despite Bitcoin’s inability to substitute fiat currencies, people tend to use it like that.
New Zealand Central Bank Governor Andrian Orr has joined the leading crypto critics like US Senate Elizabeth Warren, disregarding digital currencies, especially stablecoins, as a fiat equivalent. According to a recent Bloomberg report, the governor has chastised stablecoins as “the biggest misnomers” and “oxymorons.”
The Reserve Bank Governor also commented on the futility of Bitcoin as a means of exchange or a store of value. He added that despite its inability to stand as a substitute for fiat currencies, “people try to use it as that.” He cited,
Bitcoin is neither a means of exchange, nor a store of value, nor a unit of account, yet people try to use it as that… It’s got other purposes but it is not at all a substitute for, not even a compliment to, central bank money.
Andrian Orr commented that stablecoins do not justify their name as they do not always constitute a stable value. He added that the stablecoins depend on the financial status of the entity to which the stablecoin is pegged. Thus, they remain vulnerable to the downfall of the traditional financial economy. Commenting on the instability of stablecoins, he stated,
Stablecoins, I think, are the biggest misnomers…Stablecoins are not stable. They are only as good as the balance sheet of the person offering that stablecoin.
Further, Orr asserted that the Reserve Bank is “critically concerned” over independent digital currencies’ ability to undermine the global financial space. He added, “Mostly in that what is advertised on the tin is not what is in the tin for these purported alternatives to central bank cash.”
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