Top US financial regulators met on Monday to discuss stablecoin, an asset-backed digital currency that is exploding so rapidly that the government is struggling to catch up.
Stablecoin is a cryptocurrency that derives its value from the underlying currency or basket of assets and has long been a unique concern. Federal Reserve and other regulators when news came out in 2018 and 2019 that Facebook was considering making stable coins Be carefulI was worried that the project could grow rapidly. With the explosive growth in popularity of well-known stablecoins such as tethers and binance, the pressure to develop frameworks for monitoring them has increased even more recently.
Ministry of Finance Announced on friday Secretary Janet L. Yellen would convene a meeting of the President’s Working Group on Financial Markets to discuss regulatory efforts on stable coins. The group includes Jerome H. Powell, chairman of the Federal Reserve Board, and leaders of the Securities and Exchange Commission and the Commodity Futures Trading Commission. The meeting on Monday was expanded to include the heads of the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.
According to a Treasury statement released after the meeting on Monday, participants in the meeting said, “The rapid growth of stable coins, the potential use of stable coins as a means of payment, end users, the financial system and national security. Discussed potential risks to. ” “We emphasized the need to act swiftly to ensure that a proper US regulatory framework is in place,” Yellen said.
Powell was particularly frank about the need for better surveillance of stable coins, reiterating during his two parliamentary appearances last week that they were under-regulated.
“If there’s something that looks like a money market fund, a bank deposit, a narrow bank and it’s growing very fast, you need to put in place proper regulation, but today it’s not.” Said to Previous testimony Senate Banking Commission.
Federal Reserve Bank of Boston Governor Eric Rosengren also warned about Tether, claiming that it relies on underlying assets that may experience investor management in times of trouble.New York Attorney General Said Earlier this year Tether has always misled investors by claiming to be fully supported by the US dollar.
The Treasury said it expects the working group to make recommendations on stable coins in the coming months.Group previously Warn stable coin operator They need to maintain sufficient cash reserves to back up their offerings.
The Federal Reserve Board may also try to avoid digital products by offering its own alternatives.
Central banks are considering offering digital currencies that will probably work Much like a digital cache Spend when swiping your debit card. However, if the debit card money is tied to the commercial banking system, the central bank’s digital currency will be backed directly by the Fed, just like physical cash.
Powell said last week that removing the need for stable coins Stronger discussion In digital dollars.
But Powell told lawmakers that it was unclear whether the central bank’s digital currency would make sense. The Fed plans to publish a comprehensive report on the potential of the digital dollar, perhaps around September.
As the popularity of stable coins explodes, regulators will prepare for a response.
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