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Opinion
Aaron Brown

Are Stablecoins In or Out? Regulators Have to Decide.

To a professional risk manager, cryptocurency volatility is good for financial stability because it shows the asset has value independent of the value of dollars. 

Cryptocurrencies volatility may be good for financial stability.

Cryptocurrencies volatility may be good for financial stability.

Photographer: Mario Tama/Getty Images

The 2021 Annual Report to Congress by the Financial Stability Oversight Council released Friday illustrates the attitude toward cryptocurrencies — and stablecoins in particular — of people so deeply embedded in 20th-century government-run finance that they can sense only challenges to that system, not risks of that system.

The report’s authors seem to have missed the fact that Bitcoin was created in 2008 largely due to lack of trust in the traditional financial system. It cites the volatility of Bitcoin as a threat to financial stability. But volatility is measured in dollars per Bitcoin, and it reflects uncertainty about both dollars and Bitcoin.