Stablecoins are here to stay. But what will happen when it comes to stablecoin regulations in 2022? MakerDAO founder Rune Christensen discusses the difficulties of regulating stablecoins in 2022.
- When it comes to stablecoin regulation in 2022, MakerDAO founder Rune Christensen states that people should “be ready for the worst.”
- The author believes that the future is more stablecoin friendly for ‘super countries’ like Canada, Australia, New Zealand, the UK, and other countries that have a greater ability to adapt to climate change.
Christensen disbanded the Maker Foundation recently and wants MakerDAO to champion climate change.
Making a Stablecoin In 2022 Won’t Be Easy
Founder of MakerDAO Rune Christensen believes stablecoin regulators may be in for a difficult year. He held an Ask Me Anything ( AMA) session on Reddit to discuss the future of stablecoin regulations in 2022. And, his response was to “be ready for the worst,” especially when it comes to the US.
Christensen, who disbanded the Maker Foundation to make the DAI stablecoin ‘truly’ decentralized, now advocates for MakerDAO to combat climate change. A climate resilient regulatory environment – such as those found in Canada, the United Kingdom, New Zealand, Australia, and other nations – is more conducive to DAI’s success than that found in the United States, he claims.
“We need to set up legal core units and government relations core units for each of these places [super countries], and once we have those in place, we should be able to get a proper assessment of how safe our collateral would be.”
Answering questions on the subreddit MakerDAO, Rune Christensen shared, once the company identifies locations from where it can begin to execute large-scale real-world projects, it will be politically impossible to shut it down – as long as the bases are located in countries that have “good political environments.
Stablecoins Face A Complex Regulatory Environment That Is Difficult To Predict
The regulatory concern about how the companies behind stablecoins like Tether and Libra manage the reserves that back them has garnered the attention of global regulators, especially since stablecoins serve as bridges between the world of crypto and the traditional economy for many investors.
“It’s very hard to predict, especially because there are two aspects to that question, both what’s going to happen to stablecoins in general… and then what’s going to happen to decentralised stablecoins like DAI.”
Rune Christensen, MakerDAO’s founder, said during an AMA on MakerDAO’s subreddit, the US dollar is the currency backed by most stablecoins, such as Tether and Libra. MakerDAO’s DAI stablecoins, on the other hand, are ‘soft-pegged’ to the US dollar. In this case, it retains its value even though it is not backed by fiat currency. Instead, it is backed by other cryptocurrencies.
First published here.
Author
Chris Munch is a professional cryptocurrency and blockchain writer with a background in software businesses, and has been involved in marketing within the cryptocurrency space. With a passion for innovation, Chris brings a unique and insightful perspective to the world of crypto and blockchain. Chris has a deep understanding of the economic, psychological, marketing and financial forces that drive the crypto market, and has made a number of accurate calls of major shifts in market trends. He is constantly researching and studying the latest trends and technologies, ensuring that he is always up-to-date on the latest developments in the industry. Chris’ writing is characterized by his ability to explain complex concepts in a clear and concise manner, making it accessible to a wide audience of readers.
