Non-fiat-backed stablecoins are facing a new hurdle as regulators announce that these cryptocurrencies will not be allowed into regulated payment chains. Stablecoins are a type of cryptocurrency that are designed to maintain a stable value by being pegged to a reserve of assets, usually a fiat currency like the US dollar. However, not all stablecoins are backed by traditional currencies. This new ruling means that stablecoins that are not backed by fiat currencies will not be permitted to participate in regulated payment systems and networks.
The decision to exclude non-fiat-backed stablecoins from regulated payment chains stems from concerns about the stability and security of these types of cryptocurrencies. Regulators are worried that stablecoins lacking backing from fiat currencies could potentially lead to increased market volatility and pose a threat to financial stability. By excluding these stablecoins from regulated payment systems, authorities aim to mitigate these risks and ensure that only stablecoins that are backed by fiat currencies can be used within the regulated financial ecosystem. This ruling highlights the increasing scrutiny and regulation of the cryptocurrency industry as authorities seek to protect investors and maintain stability in the financial markets.
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