Stablecoins Are Not Stable, Shock!

G20 central bankers warn stablecoins aren't 'stable', recommend action around crypto assets

The Financial Stability Board, a collection of central bankers and financial regulators from across the G20 countries, warned that stablecoins aren’t stable.

I've always disliked the term "stable"-coin, as they are just pegged coins to a variable asset. Of course, such coins aim to be stable with respect to that pegged asset. Still, words are important.

But the problem is that such stablecoins are often not even stable to their peg! Focus on collateral means such coins are also dependent on such assets, which may not even be the original peg.

Review of the FSB High-level Recommendations of the Regulation, Supervision and Oversight of “Global Stablecoin” Arrangements [pdf].

The board also made a top-level recommendations for regulating digital currencies, with a final more detailed report promised by the middle of next year.

I have a different approach to a stablecoin ;-) 100% algorithmic.