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Fed official calls Tether a challenge to financial stability

At the closing of the Official Monetary and Financial Institutions Forum (OMFIF), last Friday, June 25, the president of the Boston Fed, Eric Rosengren, described Tether (USDT) as a risk for stability

In his presentation at the forum, Rosengren included Tether in a list of “challenges to financial stability” that the Boston Fed is closely monitoring, according to the official. Specifically, Rosengren cited USDT as one of the “new disruptors” of the short-term credit markets.

Caitlin Long, a bitcoiner with a long experience on Wall Street, commented on Friday the presentation of Rosengren, with the Fed’s warning about Tether, noting that is the first time the regulator specifically refers to this stablecoin.

Long includes in his thread on Twitter not only the pictures of the aforementioned presentation, he also shows two excerpts from an interview with Rosengren published last Friday by Yahoo News. Bitcoiner highlights that as every US dollar is settled through the SEC, the FED would have jurisdiction over all stablecoins . “It is important that the Fed say this. Caveat emptor, folks.” The Latin phrase is loosely translated as “the buyer assumes the risk”, or “sold as is”.

Rosengren states in the interview with Yahoo News that a “more holistic approach is required »Regarding financial regulation.

I am concerned that the currently very loosely regulated stablecoin market is on the way to becoming an important sector of our economy, and we have to take into account what happens when people exit that type of instrument of very quickly.

Eric Rosengren, President of the Boston Fed.

The official states that stablecoins are very similar to instruments prime of the money market, but qualifies them as more risky. «In the same way that money market funds caused a significant disruption of credit markets, there could be financial stability problems if we don’t analyze what would happen to stablecoins the next time we have a crisis in the markets. ”

The purchase capital of stablecoins would be flowing back to bitcoin, according to a published metric last Friday by Glassnode, and reported by CriptoNoticias that day. The so-called Stablecoin Supply Ratio (SSR) oscillator, reached, according to Glassnode, its lowest level since October last year. This indicates that capital has been flowing back from stablecoins to bitcoin, says Glassnode.

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Sandra Loyd
Sandra is the Reporter working for World Weekly News. She loves to learn about the latest news from all around the world and share it with our readers.

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