BlackRock, a prominent asset manager in the crypto industry, has expressed concerns about stablecoins, specifically Tether (USDT) and Circle’s USDC, and their potential impact on its proposed iShares Bitcoin spot Exchange-Traded Fund (ETF). Stablecoins, which are designed to maintain a stable value by pegging it to a specific asset or currency, have become important players in the crypto space, acting as a bridge between traditional finance and the crypto world. However, recent events have highlighted their vulnerabilities, leading BlackRock to worry about potential instability. The asset manager points to past incidents involving Tether and USDC, where legal actions were taken due to false claims about reserves not being fully backed by US dollars. These incidents have raised concerns about the reliability of stablecoins. While the proposed Bitcoin ETF does not directly invest in stablecoins, BlackRock warns that it may still be exposed to the risks that stablecoins pose to the cryptocurrency market as a whole. These risks include volatility, operational difficulties, manipulative practices, and regulatory challenges. The United States Securities and Exchange Commission (SEC) is expected to make a decision on all 12 pending spot Bitcoin ETF applications by November 17, although the decision could be delayed. While SEC approval would be a significant step forward for digital asset accessibility, it does not guarantee immediate availability of these ETFs. The approval process involves obtaining permissions from both the Trading and Markets division and the Corporate Finance division. In response to concerns about stablecoins, major players in the stablecoin space, such as Circle and Tether, have been actively lobbying lawmakers for regulatory clarity. These lobbying efforts highlight the industry’s recognition of the importance of clear regulations. Circle’s CEO, Jeremy Allaire, has emphasized the significance of embracing digital currencies, particularly stablecoins, to maintain the strength of the US dollar in the global economic system. Allaire points to the rise of China’s digital yuan as a direct challenge to the dollar’s dominance and urges Congress to decide the role of digital dollars, digital euros, and digital yuan in global commerce. As discussions on stablecoins gain momentum, the Bank of England has proposed a regulatory regime to ensure confidence in money and payment systems. The bank acknowledges the potential of stablecoins in everyday transactions and aims to establish guidelines that maintain stability and confidence in the use of these digital assets.
This News Article was automatically generated by Bob the Bot (AI)
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | 🇺🇸 |
| Sentiment | neutral |
| Relevance Score | 1 |
| People | Jeremy Allaire |
| Companies | Bank of England, Tether, United States Securities and Exchange Commission (SEC), BlackRock, Circle |
| Currencies | US Dollar, Chinese Yuan, Tether, USDC |
| Securities | None |
