Nama : Muhammad Alfareza

NIM : 050909335
Prodi : Ekonomi Pembangunan

JAWABAN TUGAS TUTORIAL ONLINE 2

MATA KULIAH “BAHASA INGGRIS NIAGA”

The rise of cryptocurrencies, particularly stablecoins, poses significant

challenges for central banks in managing inflation and ensuring price stability in
the economy. Stablecoins, designed to maintain a consistent value in relation to
a specific currency or asset, have the potential to undermine the effectiveness of
monetary policy by establishing a parallel monetary system independent of
central banks. One of the primary concerns is that stablecoins could erode the
central banks' ability to control the money supply effectively. This is because
stablecoins can be used as an alternative means of exchange and store of value,
potentially reducing the demand for traditional currencies and the need for
central banks to manage the money supply.
The widespread adoption of stablecoins could lead to a decline in the
demand for traditional currencies, exacerbating the intricacies associated with
managing exchange rates. This could result in a loss of control over the money
supply and, subsequently, the ability to influence economic growth and
inflation. Additionally, the lack of regulatory oversight over stablecoins, as they
are not backed by a government or central authority, raises concerns about their
potential use for illicit activities such as money laundering and terrorist
financing. This could undermine the stability of the financial system and the
effectiveness of monetary policy.
The rise of stablecoins and cryptocurrencies generally poses significant
challenges for central banks in managing inflation and ensuring price stability in
the economy. The potential for stablecoins to undermine the effectiveness of
monetary policy, facilitate illicit activities, and erode the central banks' control
over the money supply are all concerns that must be carefully considered by
regulators and policymakers. To address these challenges, central banks and
regulators must work collaboratively to develop appropriate regulatory
frameworks that promote innovation while protecting consumers and the
financial system. This includes ensuring that stablecoins are subject to the same
regulatory oversight as traditional currencies and that their use does not
compromise the stability of the financial system.

Reference:
https://www.financemagnates.com/cryptocurrency/coins/stablecoins-and-
monetary-policy-implications-for-central-banks-and-regulators/
https://www.orfonline.org/expert-speak/the-elusive-promise-stability-
challenges-in-the-world-of-stablecoins
https://www.cliffordchance.com/content/dam/cliffordchance/briefings/2020/09/
central-bank-digital-currencies-and-stablecoins-how-might-they-work-in-
practice.pdf