{"id":472827,"date":"2022-07-11T13:47:43","date_gmt":"2022-07-11T10:47:43","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/terra-crash-highlights-stablecoin-risk-to-financial-stability-ecb\/"},"modified":"2022-07-11T13:47:43","modified_gmt":"2022-07-11T10:47:43","slug":"terra-crash-highlights-stablecoin-risk-to-financial-stability-ecb","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/terra-crash-highlights-stablecoin-risk-to-financial-stability-ecb\/","title":{"rendered":"# Terra crash highlights stablecoin risk to financial stability: ECB"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a36ea82041e5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a36ea82041e5\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/terra-crash-highlights-stablecoin-risk-to-financial-stability-ecb\/#%E2%80%9D_Terra_crash_highlights_stablecoin_risk_to_financial_stability_ECB_%E2%80%9C\" >&#8221; Terra crash highlights stablecoin risk to financial stability: ECB  &#8220;<\/a><\/li><\/ul><\/nav><\/div>\n<h1><span class=\"ez-toc-section\" id=\"%E2%80%9D_Terra_crash_highlights_stablecoin_risk_to_financial_stability_ECB_%E2%80%9C\"><\/span>&#8221; Terra crash highlights stablecoin risk to financial stability: ECB  &#8220;<span class=\"ez-toc-section-end\"><\/span><\/h1>\n<p><img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDcvMDIxYjBmMWItODAwOS00ZjNiLThjMDctYjIzZjhjODE1Y2Q0LmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-2a0745c6>The European Central Bank (ECB) has released a\u00a0<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.ecb.europa.eu\/\/pub\/financial-stability\/macroprudential-bulletin\/html\/ecb.mpbu202207_1~750842714e.en.html\">report<\/a>\u00a0analyzing the growth of the cryptocurrency market over the past decade and the risks it poses to the existing financial system.<\/p>\n<p>A section of the report dedicated to stablecoins discussed the central role that it plays in the current ecosystem. Stablecoins are increasingly used to interlink various blockchain networks and play a critical role in offering liquidity to the decentralized finance (DeFi) ecosystem.<\/p>\n<p>The report further analyzed whether these stablecoins could find a place in the traditional financial system, but concluded that a lack of regulatory oversight added to the recent downfall of algorithmic stablecoins ecosystems such as Terra\u00a0indicates the contagion effects such stablecoins could have on the financial system.\u00a0An excerpt from the report read:<\/p>\n<blockquote><p>\u201cThe largest stablecoins serve a critical function for crypto-asset markets\u2019 liquidity, this could have wide-ranging implications for crypto-asset markets if there is a run-on or failure of one\u00a0of the largest stablecoins.\u201d<\/p><\/blockquote>\n<p>It was not just the algorithmic stablecoins that faced the crisis during the crypto market crash in May, even centralized stablecoin Tether (USDT) lost its peg for a while and saw nearly 10% in outflows.<\/p>\n<p>The ECB also shot down the idea of using stablecoins as a means of payment, claiming these are not practical as the speed and cost as well as their redemption terms and conditions have proven \u201cinadequate for use in real economy payments.\u201d<\/p>\n<p>The ECB recommended <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ropriate supervisory and regulatory measures to ensure stablecoins don\u2019t pose a risk to financial stability in European countries. However, the report did note that stablecoin penetration in the region is limited given that European payment service providers have not been very active in stablecoin markets thus far.<\/p>\n<p><strong><em>Related: Experts weigh in on European Union\u2019s MiCa crypto regulation<\/em><\/strong><\/p>\n<p>The European Union recently approved the Markets in Crypto-Assets (MiCa) framework that offers guidance for crypto asset service providers (CASPs) to operate within the Europe region. The provisional agreement includes rules that will cover issuers of unbacked crypto assets, stablecoins, trading platforms and crypto-wallets.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">3\/13 Large stablecoins will be subject to strict operational and prudential rules, with restrictions if they are used widely as a means of payment, and a cap of 200\u20acmillions in transactions\/day.<\/p>\n<p>\u2014 Ernest Urtasun (@ernesturtasun) <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/twitter.com\/ernesturtasun\/status\/1542591819980087297?ref_src=twsrc%5Etfw\">June 30, 2022<\/a><\/p><\/blockquote>\n<p><script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<p>The ECB aims to curtail stablecoin issuance to e-money institutions and credit institutions to ensure that a Terra-like incident doesn\u2019t lead to investors losing billions of dollars.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/terra-crash-highlights-stablecoin-risk-to-financial-stability-ecb\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8221; Terra crash highlights stablecoin risk to financial stability: ECB &#8220; The European Central Bank (ECB) has released a\u00a0report\u00a0analyzing the growth of the cryptocurrency market over the past decade and the risks it poses to the existing financial system. A section of the report dedicated to stablecoins discussed the central role that it plays in&#8230;<\/p>\n","protected":false},"author":1,"featured_media":472828,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjItMDcvMDIxYjBmMWItODAwOS00ZjNiLThjMDctYjIzZjhjODE1Y2Q0LmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74868,75603,128266,75493,122378,72705,70934],"class_list":["post-472827","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-defi","tag-ecb","tag-mica","tag-stablecoin","tag-terra","tag-european-union","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/472827","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=472827"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/472827\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/472828"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=472827"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=472827"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=472827"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}