Stablecoins do not act as “safe havens” during crypto market stress, but their market capitalization drops after significant shocks, according to a Bank for International Settlements working paper.
Details: The BIS paper argues that U.S. monetary policy exerts extraordinary influence on crypto markets as rising interest rates push crypto investors into traditional assets.
ICBA View: As lawmakers continue to debate a regulatory framework for stablecoins, the latest Independent Banker magazine highlights how ICBA remains engaged to ensure that policymakers address the concerns of community banks. The article notes that cryptocurrency transactions take place outside the traditional financial system in an environment where buyers and sellers maintain some anonymity, which can lead to theft and scams.
More: ICBA recognizes the need for clear guidelines on cryptocurrency and stablecoins and says it is critical that regulatory frameworks effectively address the risks associated with cryptocurrency to safeguard community banks and consumers.
