Many markets and nations are slowly embracing the prospects of cryptocurrencies and blockchain. Unfortunately, it appears that the recent crypto winter slowed down the advancement of these technologies. However, there is still a chance that things will get better after the storm.
Thankfully, there are several signs that the cryptocurrency market is still alive. Numerous cryptocurrency companies have kept revealing new technologies and future goals. Numerous other influential figures in the financial industry are also contributing suggestions for how to improve things.
The governor of the Australian central bank has made a strong recommendation to advance the crypto industry. In reality, Lowe joined other representatives from several nations in a G20 Finance meeting on July 17 in Indonesia. The impact of stablecoins and DeFi on the world financial systems was the subject of discussion in the forum.
Philip Lowe spoke during the meeting in favor of the advancement of crypto technology in the private sector. He contends that the industry will benefit if the private sector handles such advancements. Additionally, Lowe said that the terrifying hazards related to cryptocurrency would be reduced if strict rules support these advances.
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Strong Regulations Might Reduce Risks Related to Cryptocurrencies
According to Philip Lowe, various risks are associated with the cryptocurrency market. However, he believes these dangers will be significantly reduced if the State supports the industry or if strict legislation is in place to guide operations.
Everyone is aware of the significant hazards in the sector. For instance, the market’s stablecoins might abruptly de-peg and lose value overnight. Additionally, the market has not yet recovered from the consequences of the Terra USD and UST crash, drastically reducing the ecosystem’s worth in Terra Classic.
The stablecoins alone provoked a huge market crash by decoupling from US currencies. Recall that the market was already tense due to the interest rate increase. Because of this, it might be severely impacted by Terra’s descent. According to the available data, the following events led to the market losing billions of dollars in investments. Even the entire worth of the cryptocurrency market fell.
Lowe says these problems can be resolved if the public and private sectors collaborate. As a result, the private sector will develop the crypto technology while the government develops the legislation.
CEO Eddie Yue backed Lowe in the G20 meeting on the need to examine stablecoins properly. He believes there will be fewer risks in decentralized finance if these coins are reliable as they should be. Yue emphasized once more that its inventions and technologies would help to advance financial systems in the future.
Due to their high development costs, Lowe has expressed doubt about central banks’ use of digital tokens. He is not the only one concerned about a central bank digital token’s price. The National Association of Federally Insured Credit Unions expressed the same ideas in July.
However, the project’s costs don’t alarm many other nations. For instance, the EU, China, and the Bahamas are all testing or developing CBDCs.
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