Recently in a March report, the Bank for International Settlements (BIS) reviewed the impact of cryptocurrencies on the monetary sovereignty of emerging market economies (EME). The data in the report shows that the volume of transactions in EME that exchange for U.S. dollar-linked stable coins has been soaring since the CCP virus pandemic crisis in 2020.
In particular, the Turkish lira’s share of trading in the stable coin market rose from 0.3% in January, 2020 to 26% in December 2021, but the lira’s share of the global foreign exchange (FX) market is only 0.5%; a huge gap within the cryptocurrency market. Meanwhile, bitcoin trading volumes on peer-to-peer (P2P) platforms have risen sharply in many emerging market countries facing depreciation pressures and with small liquidity pools. The report also suggests that cryptocurrencies can draw off funds from countries’ local banking systems and help to avoid government exchange rate and capital controls, which can cause a series of shock to national fiat sovereignty and may also affect the stability of the real economy.
For this reason, the report encourages governments to strengthen regulatory measures on cryptocurrencies.In response, Miles Guo recently pointed out in his live broadcast that the high volatility in the cryptocurrency market has not caused financial and social unrest, which has surprised regulators around the world. On the other hand, President Biden’s digital currency executive order will further move cryptocurrencies into the mainstream. In this case, the Himalaya Coin (HCN) is bound to win the regulatory race in the future due to its stable coin design, ample reserves, its features of being pegged to gold, and taking strict KYC measures.