Government of the British Virgin Islands denies stablecoin launch, adds fuel to the flame

• The British Virgin Islands are not going to launch state-backed stablecoin.
• The market reaction is muted, though the announcement might have added pressure to the sentiments.

The Government of the British Virgin Islands (BVI) denied the information about the upcoming launch of a  state-backed stablecoin. Earlier, we reported that the government had partnered with the blockchain company LIFElabs to issue a stablecoin pegged to the US dollar with a 1:1 ratio. 

However, according to the press release, obtained by FXStreet, the country has no plans to stop using the US dollar as an official currency.

According to the press release:

Contrary to the media reports, the Government of the Virgin Islands is not in the process of developing or launching its own national cryptocurrency, neither by itself nor in partnership with any other entity, to replace the US dollar with a digital currency. The British Virgin Islands adopted the US dollar as its currency in 1959 and have made no commitments to replace it as the official currency in any form.

Meanwhile, the government confirmed that various international companies had approached it with proposals to trade and offer their services in the territory. LifeLabs.io is one of them. 

The Government emphasized that it was open to innovations and modern technologies that could improve the lives of the residents and companies registered in the country. However, the statement that the country is in the prosses of launching a state-backed cryptocurrency stemmed from a misunderstanding.

The BVI is open to dialogue with technology companies, especially those involved in green energy, smart technology and digital services – including cryptocurrencies and blockchain – that are interested in doing business in the BVI or operating from the BVI.

While the announcement was unlikely to trigger the recent sell-off on the market, it might serve as an additional bearish catalyst that further spoiled the sentiments. Bitcoin (BTC) broke below the critical $7,000 and came close to the $6,800 barrier. At the time of writing, the coin is changing hands at $6,885. Ethereum and Ripple are also nursing significant day-to-day losses.

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