Insight - Instability in stablecoins has regulators worried

Stablecoins are essentially cryptocurrencies – verified on decentralised public ledgers or blockchains – but are designed to have a stable value relative to hard currencies or gold to avoid the sort of volatility that makes bitcoin and other tokens almost impossible for most commerce.

REGULATORS are getting anxious about how mushrooming “stablecoins” – mostly US dollar-pegged crypto tokens – could sow instability in wider financial markets more directly than already hyper-volatile cryptocurrencies like bitcoin.

Western central banks and watchdogs have to date mostly stood aside from cryptocurrencies, emphasising transparency and a “caveat emptor” approach to what they see as largely speculative vehicles rather than transaction currencies per se.