While stablecoins continue to grow in usage while garnering legislative attention that may provide a regulatory regime to propel them further, some industry observers are non-believers of fiat-backed crypto.
John Reed Stark, a frequent critic of crypto and former SEC official who previously ran the SEC Office of Internet Enforcement, recently posted on LinkedIn, that stablecoins are “neither stable nor coins.”
Stark hamnmers stablecoins:
“They start with a convoluted, inefficient, antiquated technology and then inject into the mix a slew of mysterious and dubious profiteers with obvious conflicts of interest. Their dangerous proliferation enhances global financial systemic risk, imperils worldwide economic stability and could hurt most those who can least afford it.”
“The crypto-ecosystem is incestuous and highly concentrated. The three largest stablecoins, Tether, USD Coin and Binance, currently account for over 92% of the stablecoin market. To make matters worse, all three are closely connected to leading crypto exchanges who offer trading and lending services of theirs and other stablecoins.”
He is clearly not a fan.
Stark also points to several comments – letters from “expert resources” that effectively concur with his opinion.
You may read Stark’s opinion here.
Meanwhile, legislation is weaving its way through Congress that may provide a compliant path for greater stablecoin adoption.