Brian Armstrong slams fiat-backed stablecoins

Coinbase CEO Brian Armstrong has slammed fiat-backed stablecoins such as Tether, Celsius, or Gemini.

The value of stablecoins is fixed to one or more commodities and redeemable for such (more or less) on demand. The amount of commodity used to back the stablecoin has to reflect the circulating supply.

The Twitter monologue by Armstrong showed the rising discontent among crypto advocates who say governments are holding back innovation, and are too slow in making clear regulations.

Alex Mashinsky, head of crypto lending platform Celsius Network, commented that “Coinbase is fighting the good fight. If they lose… the SEC will get even more aggressive. They will draw the lines way into crypto territory”.

Coinbase has the option to register its products as securities. It is an approach that SEC chair Gary Gensler has encouraged, arguing that crypto exchanges should be “asking for permission” rather than “begging for forgiveness”.

Inflation is the world’s problem

On the other side, the whole world seems to be worried about inflation. The pan-European Stoxx 600 fell 0.2% below the flatline on Wednesday, and retail stocks went down by 2% to lead losses while oil and gas stocks gained 1%.

Hugh Gimber, global market strategist at JPMorgan Asset Management stated that “following sharp spikes in inflation across the Atlantic in recent months, the UK economy has now come to the inflation party”.

He added: “The doves among the members of the Bank of England’s Monetary Policy Committee will take some comfort in the large contribution from restaurant and hotel prices, given that much of this was driven by the heavy discounts offered under the Eat Out to Help Out Scheme last summer.

“That said, there are also signs that inflationary pressures are increasingly broad-based across many sectors of the economy.”

Also, Germany’s sudden spike in pandemic-induced inflation seems to be encouraging a considerably calmer response.

Chancellor Angela Merkel also said she was very worried regarding the climate-change policies, infrastructure, high rents and taxes. The country had the fastest consumer-price jump since 2008.

Ferdinand Fichtner of Berlin’s University of Applied Sciences commented that “it’s surprisingly quiet compared to what you would have expected 10 years ago. The outcry could have been louder. As far as the election is concerned, the topic may even be over because there’ll be no new inflation numbers”.