New Zealand Central Bank: Stablecoins Are Not Stable

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The governor of the central bank of New Zealand, Adrian Orr, strongly criticized stablecoins, stating that they cannot be considered as a replacement for fiat money as they are not truly stable.

During a parliamentary finance committee on February 12, Orr expressed his concerns about stablecoins, calling them “oxymorons” and “the biggest misnomers.”

He replied to a question on whether the Reserve Bank of New Zealand (RBNZ) was worried about decentralized digital currencies, stating that the bank was “critically concerned.”

According to Orr, Bitcoin is not a suitable means of exchange, store of value, or unit of account, despite people trying to use it as such. He also stated that stablecoins are not truly stable and are only as trustworthy as the balance sheet of the entity issuing them.

Orr added that fiat currencies like the New Zealand dollar have the support of the government and a reliable institution like an independent central bank to maintain low and stable inflation.