It gives people a sense of psychological security that isn’t necessarily justified.
Carsten Bienz
Out with stablecoins: Bienz delivers a new Norwegian finance term
Stablecoins are controversial. `The name promises more than it can deliver,´ says Carsten Bienz, who has helped introduce a new Norwegian term.
`Have you developed a new Norwegian finance term?´
The question makes the German-born NHH researcher Carsten Bienz smile.
`As a finance department, we have a responsibility to contribute to strong financial language in Norwegian. We should help develop professional terminology, not just import English terms,´ Bienz says.
`I have to admit, I’m a bit proud. It’s not every day you get to create a new Norwegian technical term.´
New name: “Linked assets”
NHH was contacted by the Norwegian Language Council, which wanted a Norwegian translation of the term stablecoins. These are cryptocurrencies most commonly pegged to the value of one U.S. dollar and are used for fast, global payments outside traditional banking systems.
The problem, Bienz argues, is that stablecoin is more of a marketing label than an accurate description.
The most well-known example is Tether, which in theory is supposed to maintain a 1:1 exchange rate with the U.S. dollar.
Originally, it was the Norwegian Financial Supervisory Authority (Finanstilsynet) that requested a better Norwegian term for the phenomenon. Bienz proposed the word tilknyttet (“linked”). Finanstilsynet now wants to use the term “tilknyttede eiendeler” instead of stablecoins.
Promising to be “stable”
`Why do we even need a new term?´
`First of all, stablecoin isn’t a Norwegian word. But more importantly, the term promises more than it can deliver, says the associate professor at the Department of Finance.
‘Stable’ is a loaded word. It gives people a sense of psychological security that isn’t necessarily justified. These are commercial products, and their value can fluctuate – both up and down.´
Not positively loaded, not negatively loaded. Just precise.
Carsten Bienz
The goal of the new Norwegian term is to remain neutral.
`Not positively loaded, not negatively loaded. Just precise, ´ Bienz says.
At the same time, tilknyttede eiendeler have become a political issue in the United States, where Congress is now seeking to tighten regulation of the market.
Some argue that this is the result of lobbying efforts by American banks.
One of the key requirements is that issuers must hold actual dollar reserves equal to the value of the currency they issue.