Stablecoins are impractical as a payment method and their current form is not suitable for use in the real economy. Indicated in this report ECB about financial stability.

Analysts concluded that the lack of regulatory oversight and the collapse of some algorithmic stablecoins like TerraUSD point to the contagious effects that such assets can have on the financial system.

“The largest ‘stable coins’ perform a critical liquidity function […]. In the event of an outage or loss of confidence, this could have broad implications for the digital asset markets.” says report.

The ECB considered it “practical” to use stablecoins as a means of payment. Experts noted that the speed and cost, as well as the conversion conditions, are “inadequate for use in payments in the real sector of the economy.”

Analysts have suggested developing a set of supervisory and regulatory measures to mitigate the financial stability risks associated with stablecoins.

The report says their entry into the region is limited – European payment service providers haven’t shown much activity.

Let us remind you according to its provisions. Mica Stablecoin issuers will be required to adhere to strict operational and prudent rules, with daily trading volume limits of €200 million.

Earlier, ECB chief Christine Lagarde said that all cryptocurrencies and stablecoins meet the definition of speculative assets and it is not appropriate to recognize currencies in them.

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