The leadership of the digital asset hedge fund ARK36 believes that the role of stablecoins may still decrease with the launch of the digital dollar.
ARK36 CEO Mikkel Morch said that the state-backed central bank digital currency (CBDC) does not have to be a competitor to private or decentralized cryptocurrencies. Often, these cryptocurrencies offer many more use cases and go beyond simple transactions, which can be convenient for users.
Morch referred to statements by US Federal Reserve Chairman Jerome Powell, who previously said that the US government would not prevent well-regulated private stablecoins from coexisting with the digital dollar. According to Morch, the development of their own sovereign digital currencies can even contribute to the spread of blockchain and other cryptocurrencies.
However, says ARK36’s chief executive, the concept of a central bank digital currency is still associated with risks in relation to stablecoins. The digital dollar can reduce the role and demand for stablecoins, provided that the country already has a market for stablecoins. Morch’s comments came in response to statements by the financial regulator and the Central Bank of Singapore, which promised to respond violently to violations in the crypto industry.
Earlier, analysts at the investment bank JPMorgan reported that the increase in the share of stablecoins in the cryptocurrency market indicates the upcoming growth of digital assets. At the beginning of the week, the share of stable cryptocurrencies in the market increased by 17%, and their capitalization is $155 billion.
Source: Bits
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