US Treasury, Financial Industry Discuss Cryptocurrency “Stablecoins”
The US Treasury Department met with a number of industry participants this week to ask them about the risks and rewards of stablecoins – a rapidly growing type of cryptocurrency, whose value is tied to currencies. traditional, according to three people with direct knowledge. meetings.
Washington policymakers are alarmed by the rapid expansion of the cryptocurrency market which broke the record $ 2 trillion in April.
The market capitalization of stablecoins stood at around $ 125 billion on Friday, according to industry data site CoinMarketCap. It is not known what financial regulations apply to these relatively new products.
U.S. financial regulators are working to understand the risks and opportunities that cryptocurrencies pose to the traditional U.S. financial system and plan to issue a number of reports on the subject in the coming months, they said.
In July, Treasury Secretary Janet Yellen said the government must act quickly to establish a regulatory framework for stablecoins.
As a sign that these efforts are accelerating, Treasury officials met with financial sector executives this week to discuss possible stablecoin regulation, the three sources said.
Two of the people said that in meetings this week, one of which was on Friday, officials asked if stablecoins would require direct monitoring if they became extremely popular.
They also discussed how regulators should try to mitigate the risks of too many people trying to cash out their stablecoins at the same time, and whether major stablecoins should be backed by traditional assets.
Officials also asked how stablecoins should be structured, how they could be used, whether the current regulatory framework is sufficient, and other safety and soundness issues, one of the people said.
Treasury officials also met earlier in the week with a group of banks and credit unions to discuss similar issues, another person said.
Treasury officials appeared to be gathering information and did not share their thoughts on how stablecoins should be regulated, the person added.
The information gathered from this week’s meetings should help shape a broad Treasury report on stablecoins expected in the coming months.
In a statement, Treasury spokesman John Rizzo said the department was examining “the potential benefits and risks of stablecoins to users, markets or the financial system.”
“As this work continues, the Treasury Department meets with a wide range of stakeholders, including consumer advocates, members of Congress and market players,” he added.
Washington policymakers fear that rising private currencies will undermine their control of financial and monetary systems, increase systemic risks, promote financial crime, and harm investors.
The United States Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve and the Office of the Comptroller of the Currency are also working on cryptocurrency projects, they said.