Treasury officers are learning the dangers if too many individuals resolve to withdraw their stablecoins unexpectedly.
Amid huge development of the stablecoin market, the United States Treasury Department has reportedly mentioned potential regulation for non-public stablecoins.
The Treasury carried out a number of conferences final week to look at the dangers of stablecoins for customers, markets or the monetary system in addition to to study their advantages and contemplate potential regulation, Reuters reported on Sept 10.
“The Treasury Department is assembly with a broad vary of stakeholders, together with shopper advocates, members of Congress and market individuals,” Treasury spokesman John Rizzo stated.
Citing three nameless sources aware of the matter, the report notes that one of many Treasury’s conferences passed off final Friday, with officers asking the crypto group whether or not stablecoins would require direct oversight if this kind of cryptocurrency turns into extensively adopted. They additionally reportedly mentioned how regulators ought to mitigate the dangers if too many individuals resolve to withdraw their stablecoins unexpectedly, and whether or not main stablecoins needs to be backed by conventional property.
Treasury officers additionally beforehand met with a bunch of banks and credit score unions to debate potential stablecoin regulation. One Reuters supply stated that the officers had been accumulating info and didn’t share their considering on how stablecoins needs to be regulated.
Related: Stablecoins are property — 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 complete 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 corporations like fee large MasterCard have reiterated their dedication to help stablecoin-related options, with Visa claiming that stablecoins are “beginning to dwell up the promise of digital fiat.”
The information comes shortly after U.S. Senator Elizabeth Warren referred to as the cryptocurrency business the “new shadow financial institution,” suggesting that it’s “value contemplating” banning U.S. banks from holding reserves to again non-public stablecoins. Previously, U.S. Treasury Secretary Janet Yellen urged the federal government to behave shortly to determine a regulatory framework for stablecoins.
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