Amid huge development of the stablecoin market, the United States Treasury Department has reportedly mentioned potential regulation for personal stablecoins.
The Treasury performed a number of conferences final week to look at the dangers of stablecoins for customers, markets, or the monetary system, in addition to find out about their advantages and take into account potential regulation, Reuters reported Sept 10.
“The Treasury Department is meeting with a broad range of stakeholders, including consumer advocates, members of Congress and market participants,” Treasury spokesman John Rizzo mentioned.
Citing three nameless sources aware of the matter, the report notes that one of many Treasury’s conferences came about final Friday, with officers asking the crypto group whether or not stablecoins would require direct oversight if such a cryptocurrency turns into broadly adopted. They additionally reportedly mentioned how regulators ought to mitigate the dangers if too many individuals determine to withdraw their stablecoins unexpectedly, and whether or not main stablecoins needs to be backed by conventional belongings.
Treasury officers additionally beforehand met with a gaggle of banks and credit score unions to debate potential stablecoin regulation. One Reuters supply mentioned that the officers have been amassing info and didn’t share their considering on how stablecoins needs to be regulated.
Related: Stablecoins are belongings — not currencies, says ECB president
The Treasury’s elevated consideration to the stablecoin market follows a parabolic surge of stablecoins over the previous yr. The whole market capitalization of main stablecoins like Tether (USDT) and USDC Coin (USDC) has jumped to greater than $125 billion on the time of writing from simply round $37 billion in January. Many conventional finance firms like fee big MasterCard have reiterated their dedication to help stablecoin-related options, with Visa claiming that stablecoins are “starting to live up the promise of digital fiat.”
The information comes shortly after U.S. Senator Elizabeth Warren known as the cryptocurrency trade the “new shadow bank,” suggesting that it’s “worth considering” banning U.S. banks from holding reserves to again personal stablecoins. Previously, U.S. Treasury Secretary Janet Yellen urged the federal government to behave rapidly to determine a regulatory framework for stablecoins.