Economist thinks stablecoin market crisis is inevitable

by in Cryptocurrency News

Paul Krugman

The US authorities have finally acknowledged the gigantic influence of the stablecoin market. Under the auspices of the Ministry of Finance, a special expert group will begin to work, which will develop a regulatory framework for regulating operations with digital currencies backed by fiat money.

However, some analysts believe a crisis in the stablecoin market is inevitable. For example, this point of view is shared by the Nobel laureate in economics Paul Krugman.

This specialist is also known in scientific circles for the fact that he is a member of the American Philosophical Society. Krugman tweeted that stablecoins are part of the economy. Only this is a digital format of money issued by private organizations.

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The banking system has already been exposed to crises, and the stablecoin market expects a similar scenario.

Paul Krugman presents the camp of the so-called bitcoin skeptics. He has previously stated repeatedly that BTC and any other digital currency are pyramid schemes.

Such financial schemes can exist for a long time, as they are fueled by interest from a large number of people and innovative technology for processing transactions. However, such systems are still doomed to self-destruction if they overheat, the economist believes.