As the clamor for increased stability in the crypto market continues to gain traction, Vitalik Buterin has added his opinion to the call.
Buterin responded to Coinbase’s Brian Armstrong, who requested to know if any token was pegged to consumer prices. The Ethereum developer responded in the affirmative by highlighting the limitations of fiat-pegged stablecoins.
He also added that in a high inflation period like the current one, the available dollar-backed coins are not enough for the market.
Can a New Crypto-Stablecoin be the Answer?
Buterin is advocating for the creation of a better, inflation-resistant token. He also calls for a halt in the overdependence on a single digital asset. According to him, it is time for cryptocurrency to wean itself from dependence on a particular token type.
Concerning USDC, Buterin emphasized the structural concerns associated with the appeal. In this regard, popularity could frequently lead to political power and internal strife.
Furthermore, he wondered what would happen to USD stablecoins “if something happened to the U. S.” or the currency. Buterin believes that there is a need to “find out” a measure of stability related to consumer pricing rather than one tied to a single fiat currency.
In response to the Bitcoin maximalist claim that once BTC reaches mainstream use, it will become more stable, Buterin stated that this approach is “very much an act of faith” rather than “a realistic appraisal” of all options.
The U.S. Federal Reserve Chairman, Jerome Powell, stated that people and businesses must plan for inflation, which will require time to reduce.
Powell made the remarks on August 26 during an economic policy conference at Jackson Hole, Wyoming.
Markets promptly sold off, a trend that extended throughout the next week. Bitcoin dropped 7% of its price throughout this period. Similarly, Ethereum plummeted by 8% as the bloodbath raged on.
Since March, inflation has been a hot topic after the Fed raised interest rates for the first time in more than three years. Nonetheless, six months later, the harsh reality dawns on average citizens.
According to John Williams, president of the New York Federal Reserve Bank, reducing inflation to 2% will take a couple of years. This is an indication that the heat is far from over. The situation appears too complex, and the Feds can not handle the issue at the current level.
From the perspective of Goldman Sachs, the popular investment bank, the surging inflation has led to a spike in energy costs and reduced living standards.
The situation is almost identical throughout the U.S. and Europe; the soaring prices have battered household incomes. In addition, consumer confidence is at its lowest point in history as the world sits on the brink of an economic mess.