Opinion: CBDCs could bring stability to the DeFi sector

CBDC can interact with decentralized finance (DeFi) and provide the sector with greater stability. This view was expressed by Thomas Moser, a member of the Swiss National Bank (SNB) board, in an interview with Cointelegraph.

According to him, centralisation and decentralisation in digital currencies “can work together”. As an example, he cited stablecoins USDT and USDC.

«Thus, ‘something centralized’ has already helped DeFi a lot,» said Moser.

However, central bank digital currency outperforms «stablecoins» because «does not entail counterparty risk», the SNB official added. He noted that cryptocurrencies such as Bitcoin and Ethereum are not suitable for sustaining DeFi growth due to volatility.

«Algorithmic stablecoins also do not entail counterparty risk, but so far we have not seen successful projects. CBDC can provide greater stability and lower risks», — said Moser.

Earlier, the heads of leading central banks deemed justified tightening of regulation of the DeFi sector in light of its development.

In August, the head of the Bank of Finland, Olli Rehn, criticized cryptocurrencies and stated that CBDCs possess immunity to volatility and can be trusted without reservation.

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