Legal Interpretation of the Week: Will Stablecoin Decoupling Be a Real Threat to Financial Stability?

What will be remembered this week is that stablecoins have shown an unexpected ability to decouple. Terra’s TerraUSD (UST) fell to a staggering $0.29 as cryptocurrencies and financial markets in general collapsed, but it’s also the star of the stablecoin niche, while Tether (USDT) also lost balance, shortly after Inside slipped to $0.96.

U.S. Treasury Secretary Janet Yellen believes there is a need to reassure everyone that decoupling does not pose a threat to U.S. financial stability given the size of the stablecoin market. At the same time, she called on lawmakers to create a “coherent federal framework” for stablecoins to address the risks. You can never be too careful, right?

However, US SEC Commissioner Hester Peirce seems in the mood to experiment. Known as the crypto mom, she noted that while stablecoins should have their own regulatory framework, regulators need to allow failure "because that's obviously part of trying something new."

public support, public blame

Central bank digital currencies (CBDCs), the closest analogues to stablecoins, are slowly gaining ground, at least in policymakers’ plans. The Bank of Israel says it has public support for its "digital shekel" program, which was briefly suspended but entered a new testing phase last year. In that sense, the ECB has nothing to show for it, and it is continuing to pitch various anonymous options for its digital euro to the public.

How to Get the United Nations to Support Cryptocurrencies

We rarely hear major international organizations express concern about a downturn in the crypto market. So the award goes to the Central Bank of Nigeria (CBN), which is working so hard to kill any competition from private digital currencies to its central bank digital currency, eNaira, that the Secretary-General of the United Nations and the Organization for Economic Co-operation and Development (OECD) had to admit: “These Restrictions have crippled foreign direct investment in the fintech sector and negatively impacted the millions of young Nigerians who earn a living in the industry.” The thing is, this doesn’t seem to bother CBN too much.

Holders are not taxed

Some countries try to stay innovative, others make life easier for holders. The German Ministry of Finance has published new cryptocurrency tax guidelines. Under the guidelines, individuals who sell Bitcoin or Ethereum more than 12 months after purchase will not be taxed if they realize a profit. Additionally, bitcoin miners who buy newly circulated bitcoin will also be exempt from paying taxes after holding it for a year.

Cointelegraph Chinese is a blockchain news information platform, and the information provided only represents the author's personal opinion, has nothing to do with the position of the Cointelegraph Chinese platform, and does not constitute any investment and financial advice. Readers are requested to establish correct currency concepts and investment concepts, and earnestly raise risk awareness.