At the G20 finance officials meeting in Indonesia, the board of countries’ officials was discussing the pros and cons of stablecoins and decentralized finance (DeFi). Australian central bank Governor Phillip Lowe believes that blockchain technology developed by the private sector under government regulation would prove fruitful for innovation.
In his opinion, strong regulations could help reduce risks to the public. He said:
“If these tokens are going to be used widely by the community, they are going to need to be backed by the state or regulated just as we regulate bank deposits.”
However, his opinion of the digital token system was not met with a positive response by the countries developing their own CBDCs, such as China, the European Union, and the Bahamas.
During the summit, the Hong Kong Monetary Authority (HKMA) chief said that to diminish the risks of cryptocurrencies and DeFi projects, the scrutiny of these tokens could be practical.
Overall, many of these officials believe that the technological innovation of stablecoin is important for the future of the financial system, which means that the discussion on this matter might still not be over yet.