The European Central Bank has released fresh study covering cryptocurrencies and stablecoins. The experts believe that stablecoin is a digital means of value rather than a currency, though it is based on a number of mechanisms for stabilization to reduce price fluctuations.
According to the document, the European Central Bank classifies stablecoins following different concepts that are used to maintain price rates. There are four main groups of stablecoins including tokenized funds, off-blockchain asset-backed stablecoins, blockchain asset-backed stablecoins and algorithmic stablecoins.
During the study, it was discovered about 54 projects of stablecoins with 24 being already on the operational stage.
According to the available information, the capitalization of stablecoin market reached EUR 4.3 billion this July. For reference, the volume was EUR 1.5 billion in January 2018.
Tokenized funds turned to be the most popular type of stablecoins with almost 97% of overall monthly trading volume among all projects.
"A number of obstacles related to the lack of accountable institutions hinder the usability of collateralised and algorithmic stablecoins beyond a core user base motivated by a strong preference for privacy and an aversion to the scrutiny of trusted institutions...," noted the experts in the study.
The report reads that the regulators' positions towards stablecoins remain unclear. The distribution of stablecoins can require better management.