China Central Bank: Stablecoins Pose 'Risks' To Global Financial System

China's central bank is "quite worried" by the potential impact of global stablecoins on the international financial system, CNBC reported on Thursday.

Speaking to reporters, Fan Yifei, a deputy governor of the People's Bank of China (PBoC), said that, “Some commercial organizations’ so-called stablecoins, especially global stablecoins, may bring risks and challenges to the international monetary system, and payments and settlement system.”

Stablecoins are cryptocurrencies that claim to be backed by fiat currencies at a 1:1 ratio and aim at overcoming the price volatility by maintaining a stable value in relation to a state-issued currency. They are often used as a store of value or units of account, with payments being another popular use case.

Tether (USDT) is the most widely used stablecoin, with a market cap of over $62 billion, according to data from Nomics. While Tether claims that each USDT token is backed 1:1 by U.S. dollar cash reserves, its claims have been called into question by critics.

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