Page 87 - Azerbaijan State University of Economics

Kh.R.Taghiyev , U.F.Yusifov, M.R.Taghiyev: Stablecoıns and Theır Specıfıc Features

With multi-currency wallets, one can quickly convert crypto into traditional money.
For example, Trust Wallet, one of the most popular multi-active crypto wallet,
allows to spend your stablecoins by converting them into traditional money and
cashing them out. On the other hand, stablecoins are not accepted everywhere. The
possibility of using them depends on national policies and regulations. Some
countries completely ban cryptocurrency, while others continue to promote its use.
In addition to using it for daily trading, stablecoins can also be traded on crypto
exchanges. Some exchanges allow you to lend your stablecoins and earn interest.

The main difference between the CBDC and the stablecoin is that the CBDC is
issued by the country's monetary policy body or the central bank, while the
stablecoin is issued by a private organization.

The experiences of the UK, China, the United States, Thailand and the international
card organization VISA on stablecoins have been studied.

The UK Treasury is proposing to include stablecoins in the Bank of England's
regulatory framework in line with its obligations under the Banking Law regarding
systematic payment systems. This is stated in the last consultation of the Ministry of
Finance on the regulatory approach to cryptocurrencies and stablecoins in the UK.
People's Bank of China states that digital currencies issued by private entities,
including stablecoins, have been used as speculative tools threatening financial
security and social stability, and serve as payment for illegal activities and money
laundering.

Stablecoins are also used in the United States. Examples include USD coin and
Tether. However, as their activities are not regulated by any legislation, the US
government, especially financial regulators, have stated that they are preparing to
take appropriate steps to prevent the risks that the use of stablecoins could pose to
the financial system. The Central Bank of Thailand is taking steps to legalize illegal
foreign currency-backed stablecoins, asset-backed stablecoins and algorithmic
stablecoins. On March 29, 2021, Visa International Card Organization announced
that it will allow customers to make transactions with USD Coin (USDC), a
stablecoin fixed at 1:1, and became the first large payment network to use
cryptocurrency to make payments.

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