Bank of Italy sounds alarm about stablecoins – Business

Bank of Italy Deputy Director General
Chiara Scotti on Thursday sounded the alarm about the risks
posed by crypto assets in general, and stablecoins in
particular.

   
A stablecoin is a type of cryptocurrency whose value is supposed
to be pegged to, and collateralized by, a reference asset, which
can be fiat money or another cryptocurrency.

   
“If not properly regulated, stablecoins can pose significant
risks to financial stability, market integrity, consumer
protection and the smooth functioning of the payments system,”
Scotti told the Parliamentary Commission of Inquiry into the
Banking, Financial and Insurance System.

   
“In the event of loss of confidence in the ability of a specific
stablecoin to maintain its anchor, panic phenomena could be
generated among users, with a rush to cash in”.

   
Scotti also stressed the possible use of stablecoins “for
illicit purposes” to disguise the origin of financial resources
for activities such as money laundering and the circumvention of
sanctions.

   

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