- The governor of the Reserve Bank of New Zealand, Adrian Orr, expressed doubts about the stability of stablecoins.
- He emphasized that these assets cannot replace fiat currency.
- Adrian Orr also voiced his concerns about using Bitcoin as a unit of account or medium of exchange.
During a speech to the Parliamentary Finance Committee on February 12, 2024, Adrian Orr, the governor of the Reserve Bank of New Zealand (RBNZ), stated that stablecoins and Bitcoin are not suitable as means of exchange or stores of value.
Orr criticized “stable coins” and highlighted the regulator’s concerns about decentralized digital currencies and stablecoins. He argued that these assets are not stable and cannot replace traditional fiat currency.
â€œBecause it is still early in the development of digital assets and blockchain technology, we recommend that the government and regulatory agencies proceed cautiously and avoid designing and implementing a fully integrated and consistent regulatory framework for digital assets at this time.â€¦ pic.twitter.com/A8uDtX3yZK
â€” Joshua Rosenberg (@_jrosenberg) August 18, 2023
Adrian Orr urged the public to view these assets as speculative coins rather than equivalent to traditional cash held in banks.
Orr suggested the need for regulatory pressure on the stablecoin industry and referenced the United Kingdom as a jurisdiction actively addressing the issue.
In a July 2023 report, New Zealand explored various options for a potential central bank digital currency (CBDC). The report advised against hasty regulation of cryptocurrencies, suggesting the creation of consistent guidelines for digital asset management within existing laws:
It’s worth mentioning that in November, the Easy Crypto cryptocurrency exchange launched a stablecoin pegged to the New Zealand dollar. Additionally, the United States Congress is close to passing legislation regarding “stable assets.”