Curve Finance Founder Highlights Geopolitical Risks for Centralized Stablecoins
Michael Egorov, the founder of Curve Finance, has expressed concerns about the geopolitical risks that centralized stablecoins face due to government regulations, rather than reserve issues that investors are typically worried about. In an interview with Cointelegraph, Egorov pointed out that the underlying assets supporting over-collateralized stablecoins, such as cash deposits of financial institutions and U.S. Treasury bonds, are at risk of being frozen or confiscated.
As a solution to these potential sanctions, Egorov suggests algorithmic stablecoins, which rely solely on software running autonomously on-chain due to their fully decentralized nature. He emphasized that algorithmic stablecoins can provide investors with “algorithmic guarantees” that their funds will not evaporate because of asset confiscation, unlike stablecoins backed by fiat currency assets.
Tether CEO Paolo Ardoino had previously raised similar concerns regarding the EU’s MiCA regulations, stating that the bank reserve requirements for stablecoin issuers could introduce systemic risks.
Source: [BlockBeats](https://m.theblockbeats.info/news/268603)