Zach Burks, CEO of Mintable, which aims to make the most of Ethereum’s blockchain tech to allow users to create, manage, and sell digital files with the benefits of provable ownership, has commented on why Bank of England Governor Andrew Bailey is being unnecessarily “inflammatory” about stablecoins for the sake of “playing politics.”
Zach Burks, CEO of Mintable, shared insights with CI this past week on stablecoins and the Bank of England by noting that stablecoins pose no risk to global finance.
Burks pointed out that almost all stablecoins have “a blacklist functionality for hackers, which freezes funds.” They added that most stablecoins are operated by public compamies or regulated institutions – “already duty-bound to the laws that govern them.”
According to Burks, the real reason Andrew Bailey and the Bank of England are being inflammatory towards stablecoins is “that they threaten the very idea of a feasible central bank digital currency, a core part of Labour’s ‘digital ID’ agenda.”
They added that this “fearmongering is designed to shape the initial perception of blockchain-based technology for those who don’t know any better.”
Burks claims it’s the same as saying blockchain is “a risk to the banking system because it’s not regulated the same way banks are, i.e. under the centralised control of the Bank of England or the European Central Bank.”
They concluded that the ruling classes are looking to ‘burn the crypto witch’ at all costs, and in a world dominated by “a growing acceptance of crypto, Andrew Bailey’s remarks sound wildly dull and highly unfashionable.”
While Burks does mention some valid points, it’s also worth noting that not all stablecoins are created equal. Some so-called algorithmic stablecoins have lost their pegs during times of uncertainty and various technical issues. Moreover, these fiat or commodity backed digital tokens need to be compliant and currently, regulators are still trying to understand how DeFi and crypto-assets actually work.
It’s still early days for crypto and blockchain tech (relatively speaking). The industry has matured significantly but we still need more regulatory clarity and better investor and trader education initiatives. Stablecoins also pose certain risks such as not being sufficiently backed by assets or not being properly regulated. For now, this area of DeFi is still developing and may need at least a few more years before it can achieve further mainstream adoption and overall stability.
