Reserve Bank of New Zealand Governor Adrian Orr has labeled stablecoins 'the biggest misnomers' and 'oxymorons', questioning their stability and viability as a fiat money replacement.

Orr points out that the stability of stablecoins is dependent on the financial health of the entities backing them, implying potential risks to the financial system.

Bitcoin is also dismissed by Orr as an alternative to central bank money, highlighting a broader skepticism of cryptocurrencies within the central banking community.

U.S. Treasury Secretary Janet Yellen and others have raised concerns over stablecoins, indicating a consensus on the need for regulatory oversight in the crypto space.

The Federal Reserve and some businesses are hesitant about adopting blockchain and stablecoin technologies due to the perceived risks.

Despite the cautious stance, the Reserve Bank of New Zealand is considering the development of its own central bank digital currency, joining 46 other countries in similar research.