Creators of stablecoins in the world of cryptocurrencies may introduce risks previously unseen into the ecosystem, warned Barry Eichengreen, economist at the University of California, Berkeley, in an article for Project Syndicate.
The comments from Professor Eichengreen point out that there are no safe models for stablecoins in the crypto world. Even with money in the bank backing the tokens, the usage of coins like Tether (USDT) remains awkward, he believes. There would also be additional regulatory matters, and usage of USDT would not be as liquid as using dollars, the professor warns:
“This exchange may be attractive to money launderers and tax evaders, but not to others. In other words, it is not obvious that the model will scale, or that governments will let it.”
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