ECB report: If financial institutions manage traditional assets through blockchain technology, it may invalidate stable currency

The European Central Bank (ECB) recently released a report saying that if financial institutions use distributed ledger technology to record traditional assets, such as commercial bank currencies and regulated electronic money, the existence of stable currencies may become redundant. This is because the regulatory and governance uncertainty surrounding the stable currency is growing, and even if the stable currency is applied more, even if its smart contract renewal and cybersecurity framework governance are improved, they may still lack regulatory review and recognition. By studying the main mechanisms that stabilize the value of the currency, the report concludes that certain types of stable currencies are likely to maintain the stable value of the reference currency, no matter how the market develops. “This result shows that there is a trade-off between the level of innovation offered by different types of stable currencies and their ability to maintain a stable reference to currency prices.” According to previous news, the ECB outlined four main types of stable currencies in its report. These include stable coins that are regulated as token funds, chain-linked mortgage-stable coins, chain-linked mortgage-stable coins, and algorithmic stabilization coins. According to the ECB, there are currently at least 54 stable currency projects, 24 of which are in operation. The total market value of stable currencies increased from 1.5 billion euros (1.7 billion US dollars) in January 2018 to 4.3 billion euros (4.8 billion US dollars) in July 2019.