The stablecoin fallout puts calls for crypto regulation back in the spotlight. However, such attempts must not hamper progress, says Raj Chowdhury, CEO of PayBito.
PALO ALTO, California., June 13, 2022 /PRNewswire-PRWeb/ — The collapse of the stable coin ecosystems Terra and LUNA shocked crypto enthusiasts and investors worldwide. Pegged to the US dollar, they should be less volatile than traditional digital assets. The widespread panic caused by the crash was extinguished 200 billion dollars. The events are driving the long-awaited call for crypto regulation. PayBito CEO Raj Chowdhury believes that while a crypto regulatory framework is necessary, care should be taken to ensure that the regulation imposed does not slow down crypto innovation.
Several causes have been attributed to the failure of stablecoins. Some experts point out algorithmic flaws in the token architecture. Another possible explanation is the large-scale short selling by institutional investors that led to de-pegging. The updated Terra token fell over 70% within 2 days of its issuance. All of these incidents recently brought together the Basel Committee, a coalition of 28 central banks and financial regulators, to discuss the need for a global framework to carefully mitigate risks from digital assets.
The PayBito boss, also a blockchain pioneer, explains: “The stablecoin disaster reflects the need for proper resolution of the underlying issues and adherence to a standardized framework. The domino effect can be avoided with appropriate regulatory measures that keep the spirit of innovation alive.”
Persistent global inflation presents a good investment opportunity in digital assets. Originally designed as an inflation hedge, institutional investors’ crypto asset allocation patterns reflect their belief in the long-term potential of cryptocurrencies. Choosing the right option is crucial as crypto markets are known for their volatility.
“The global adoption of crypto is evidenced by the market cap exceeding $1 trillion. Cryptocurrencies will inevitably play an essential role in reshaping the future financial system. Stalling growth will simply be a deterrent to progress,” concluded Chowdhury, who had previously stated that inflation would prove to be the ultimate test for cryptos and how their evolution rests on equilibrium and active association.
Led by Chowdhury, PayBito is a US-based global crypto exchange. A pioneer in integrated crypto-forex technology, PayBito’s crypto trading platform offers state-of-the-art security features with multiple trading options, as well as crypto-backed lending and banking solutions. Institutional investors venturing into crypto trading services can leverage PayBito’s white-label solutions for crypto exchanges, portfolio management, algorithmic trading, custodial services, and more. The exchange recently announced discounts on all of its white-label products for a limited time.
The growing demand for crypto regulation is justified considering that the stablecoin crash wiped out billions of dollars in valuations, leading to crypto market instability. A stable regulatory framework that leaves room for innovation will be beneficial for both crypto development and the community at large.
Raj Chowdhury is Managing Director of HashCash Consultants and PayBito. Raj pioneered the first implementation of blockchain technology for trade finance and remittances between two of the largest global banks. Raj is a prominent voice in the blockchain and cryptocurrency space and actively collaborates with policymakers in the space. He is a contributor to Economic Times, Business World, CNNMoney and advises industry leaders on blockchain adoption. He is a member of Asha Silicon Valley, a non-profit organization dedicated to educating children in emerging markets. As the author of The Dark Secret of the Silicon Valley, Raj is an investor in blockchain and cryptocurrency companies and an active member of the philanthropic community.
COLEEN F, Hashcash Digest, +14159662907, [email protected]