Stablecoins have increasingly become part of the cryptocurrency ecosystem. Tether, the most popular stablecoin, is also the most traded cryptocurrency, with several billion dollars of it circulating daily.
Unlike normal cryptocurrencies, stablecoins are pegged to a fixed amount - normally the dollar - either through backing with assets or an algorithmic process. Therefore, they have little use as a speculative asset class. So why should institutional investors be interested in stablecoins, and why are regulators such as the Bank of England so worried about them? Stablecoins have increasingly attracted attention from regulators, with BoE governor Andrew Bailey saying last year that he was "sceptical" that stablecoins could ever be a safe asset. Last week, a consultation paper suggested the ...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes