EXCLUSIVE U.S. Treasury, financial industry discuss cryptocurrency ‘stablecoins’
WASHINGTON, Sept 10 (Reuters) – The U.S. Treasury Division met with a variety of business individuals this week to quiz them concerning the dangers and advantages posed by stablecoins — a quickly rising sort of cryptocurrencies, the worth of which is pegged to conventional currencies, in keeping with three individuals with direct data of the conferences.
Washington policymakers are alarmed on the quickly increasing cryptocurrency market which exceeded a document $2 trillion in April. As of Friday, the market cap of stablecoins stood at roughly $125 billion, in keeping with business information web site CoinMarketCap. It’s unclear which monetary rules apply to those comparatively new merchandise.
U.S. monetary regulators are working to grasp the dangers and alternatives posed by cryptocurrencies to the normal U.S. monetary system and plan to subject a variety of stories on the topic in coming months, they’ve stated.
In July, Treasury Secretary Janet Yellen stated the federal government should transfer rapidly to determine a regulatory framework for stablecoins.
In an indication these efforts are gathering tempo, Treasury officers this week met with monetary business executives to debate potential stablecoin regulation, the three sources stated.
Two of the individuals stated that in conferences this week, one in every of which befell on Friday, officers requested whether or not stablecoins would require direct oversight in the event that they turn into extraordinarily well-liked. In addition they mentioned how regulators ought to attempt to mitigate the dangers of too many individuals making an attempt to money of their stablecoins on the identical time, and whether or not main stablecoins needs to be backed by conventional belongings.
Officers additionally requested about how stablecoins needs to be structured, how they might be used, whether or not the present regulatory framework is ample, and different security and soundness points, one of many individuals stated.
Treasury officers additionally met earlier within the week with a gaggle of banks and credit score unions to debate related points, one other of the individuals stated. Treasury officers seemed to be gathering info and didn’t share their pondering on how stablecoins needs to be regulated, this particular person added.
The data gathered at this week’s conferences is probably going to assist form a broad Treasury report on stablecoins anticipated within the coming months.
In an announcement, Treasury spokesman John Rizzo stated the division is inspecting “potential advantages and dangers of stablecoins for customers, markets, or the monetary system.”
“As this work continues, the Treasury Division is assembly with a broad vary of stakeholders, together with shopper advocates, members of Congress and market individuals,” he added.
Washington policymakers fear the rise in privately-operated currencies may undermine their management of the monetary and financial programs, improve systemic dangers, promote monetary crime, and damage traders.
The U.S. Securities and Trade Fee, the Commodity Futures Buying and selling Fee, the Federal Reserve and the Workplace of the Comptroller of the Forex are additionally engaged on cryptocurrency initiatives, they’ve stated.
Writing by Michelle Value; modifying by Lauren LaCapra and David Gregorio
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