New Zealand’s Central Bank Chief Criticizes ‘Stablecoin’ as an Oxymoron

Adrian Orr, Governor of the Reserve Bank of New Zealand, expressed significant concerns about cryptocurrencies and stablecoins while addressing the parliamentary Finance Committee.

According to him, Bitcoin is neither a medium of exchange, a store of value, nor a unit of account, despite attempts by people to use it as such.

Orr added that stablecoins also cannot replace paper money, as they are “unstable,” and the term itself is merely an “oxymoron.”

“Stablecoins are the most misleading term. Stablecoins are not stable. They are only as good as the [bank] balance of the person offering this ‘stable coin’,” he stated.

The head of the regulator explained that only fiat currencies can possess the characteristics of a means of payment, as parliament and the central bank support their “low and stable inflation.”

“To be perfectly frank, cryptocurrencies are speculative coins, not currency and not central bank cash,” Orr declared.

He pointed to the existing regulatory pressure on stablecoins, citing the United Kingdom as an example, where the development of regulations for these assets “is proving very difficult.”

Back in the summer of 2021, the Reserve Bank began exploring the potential of a national digital currency. Among other issues, the possibility of replacing cash with a CBDC is being discussed.