Swiss National Bank Deputy Head Thomas Moser reportedly shared his perspective regarding the current trend in CBDCs, stablecoins, and regulations at the European Blockchain Convention 2022.

Specifically, Moser reportedly had discussions about the innovation and adoption of private stablecoins, as well as central banks’ plans for introducing CBDC, believing co-existence is achievable. 

Per Moser, the function of CBDCs would be highly basic, and there will be room and facilitation for private stablecoin issuers to include services on top of them to satisfy retail customers’ needs.

Upon inquiries regarding the recent fall of Terra’s TerraUSD (UST) and its subsequent effect on regulations, Moser claimed a long-running impact on regulators is visible.

He additionally stated that the event might be the fueling force for regulators to lean towards centralized stablecoins rather than decentralized ones, although not every decentralized stablecoin is like UST. 

“My fear is […] that people will throw all decentralized stable currency in the same category, which is not true, you know, so there’s a danger. I think that regulation will favor centralized stablecoins.”

As for developments focusing on regulations, Moser hinted that it would be available but required time. He mentioned the instance of internet regulations from the 1990s, where regulators took the time to generate new rules rather than applying the then currently employed telephone regulations to the contemporary scene.

Per Moser, should the implementation of existing financial regulations be carried out for the crypto sphere, the DeFi ecosystem would be shut down entirely. 

“If you just take the existing regulation and put it on crypto, then DeFi will disappear because you will only have centralized entities that you can regulate with the current regulation. For DeFi, where there is no single entity to be held accountable for, which is really just smart contracts interacting, you need a different type of regulation.”