The recommendations were outlined by the Financial Stability Board (FSB). This agency is authorized to make recommendations about financial systems to Central Banks and finance ministers of G20 member nations.
FSB recommended that fiat pegged digital currencies should be scrutinized thoroughly, proposing regulations that could end in a total ban of stablecoins, such as Tether (USDT).
The Financial Stability Board (FSB) noted;
“Authorities should have the ability to mitigate risks associated with or prohibit the use of certain or specific stablecoins in their jurisdictions where these do not meet the applicable regulatory, supervisory, and oversight requirements.”
Stablecoins have been helpful tools for cryptocurrency traders to save their holdings whenever market is displaying its usual high volatility. So, this move to heavily scrutinize stablecoins cannot be generally welcomed by the crypto enthusiasts, due to the aforementioned circumstance, but could be beneficial to Bitcoin (BTC) and XRP holders.
Debate on Which Asset Would Mostly Gain from $8B of Stablecoins’ Market Cap
A popular and top cryptocurrency analyst, Mati Greenspan initiated this debate on Twitter about 2 days ago. He hinted that relatively $8 billion is invested in stablecoins.
Considering the threat of banning stablecoins, it’s certain that many crypto holders that have invested in stablecoins of any kind would want to cash out. Greenspan then asked where the value will go.
He asked, “More than $8 billion now being stored in so called stable coins. If those start to get regulated, where do you think that value will go?”
More than $8 billion now being stored in so called stable coins. If those start to get regulated, where do you think that value will go? pic.twitter.com/sbgaTfoTK9
— Mati Grrrrrreenspan (tweets aren't trading advice) (@MatiGreenspan) April 16, 2020
As expected, this question attracted many reactions from the cryptocurrency community members. Several people were of the opinion that Bitcoin (BTC) could simply become the investors’ choice.
Another set of commenters averred that Ripple’s digital token XRP would as well be the choice of some of the investors.
“BTC for deep long term storage, XRP for working capital. forgive the contradiction in terms but BTC will be the new gold and XRP will be the new FIAT.”
BTC for deep long term storage, XRP for working capital. forgive the contradiction in terms but BTC will be the new gold and XRP will be the new FIAT
— Lee Smeaton (@NavyReg1970) April 16, 2020