Coinbase CEO Proposes Pegging Stablecoins to Inflation and Not to Fiat Money
- Brian Armstrong believes that true stablecoins should be issued that are linked to CPI (Consumer Price Index).
- The intention of this type of coin is to preserve the purchasing power of the people.
- However, the CEO of the American exchange believes that the current stablecoin represents an important milestone within the crypto ecosystem.
The CEO of the cryptocurrency exchange Coinbase, Brian Armstrong, proposed developing stablecoins whose value is linked to the Consumer Price Index (CPI), which measures the level of inflation in countries, and not to fiat money such as the dollar or the euro.
The proposal was made by Armstrong during a streaming conversation about the launch of Coinbase in Australia, where he spoke about the future of cryptocurrencies and Web3.
The suggestion of the CEO of Coinbase was published on YouTube on Wednesday, October 5, but hours later, the video was put on private mode. Armstrong highlighted the importance of current stablecoins but estimated that other cryptos whose price is linked to the CPI could emerge in the future.
The issuance of a stablecoin linked to the purchasing power of consumers would allow people to buy a certain product or service today and, five years later, they would be able to buy it again with the same currency.
The Coinbase executive commented that the intention with this type of cryptocurrency is to “stay flat with purchasing power,” unlike the current stablecoin scheme that maintains a 1:1 parity with respect to the dollar as fiat currency.
Armstrong proposed that this feature of new stablecoins should be available worldwide with all cryptocurrencies of that type.
On the Flipside
- The proposal of the controversial CEO of the American exchange is not new. Armstrong had previously questioned the stability of dollar-pegged stablecoins due to inflation.
According to Armstrong, a truly stable cryptocurrency should be created “that tracks a basket of real-world goods” and is anchored to the purchasing power of the people. However, Armstrong believes current stablecoins to represent an “important milestone” within the crypto ecosystem.
Why You Should Care
- The relevance of stablecoins comes from the fact that they allow trading pairs and exchanges.
- Likewise, they allow unbanked holders to obtain cryptocurrencies linked to the dollar or the euro. This was not possible before, Armstrong noted.
More articles related to statements by Coinbase’s Brian Armstrong can be read below:
Coinbase CEO Brian Armstrong Speaks Out Against Regulations
In 10 Years There Will Be 1 Billion Cryptocurrency Users, Coinbase CEO Predicts
Read more: https://dailycoin.com/coinbase-ceo-proposes-pegging-stablecoins-to-inflation-and-not-to-fiat-money/
Text source: DailyCoin.com
