Yellen of the US Treasury said regulators will meet on Monday to discuss stablecoins


U.S. Treasury Secretary Janet Yellen testifies before the Senate Appropriations Subcommittee on Financial Services regarding the Treasury Budget Request for Fiscal Year 22 at Capitol Hill in Washington, DC, United States, on June 23, 2021. Shawn Thew / Pool via REUTERS / File Photo

July 16 (Reuters) – U.S. Treasury Secretary Janet Yellen on Friday announced that she would meet with regulators next week to discuss “interagency work” on stablecoins, a growing class of digital currencies that is making the increasingly scrutinized by policymakers.

The President’s Financial Markets Task Force will meet with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation on Monday to review the benefits and risks of stablecoins, a form of cryptocurrency linked to assets. more traditional ones, including fiat currencies like the dollar.

“Given the rapid growth of digital assets, it is important that agencies work together to regulate this industry and develop any recommendations for new authorities,” Yellen said in a statement, noting that it was important that regulators assess the potential benefits of stablecoins while “mitigating the risks they may pose to users, markets or the financial system”.

Stablecoins and other digital payment options are receiving more attention from lawmakers, Federal Reserve officials, and other policy makers as new options emerge and gain traction.

Fed Chairman Jerome Powell told lawmakers during Congressional hearings this week that stablecoins “are growing incredibly fast,” but highlighted their lack of proper regulation as a concern.

“If we’re going to have something that looks like a money market fund or a bank deposit… we really should have proper regulation and today we don’t,” said Powell. Read more

US Senator Elizabeth Warren sent a letter to Securities and Exchange Commission (SEC) Chairman Gary Gensler last week asking him to address the risks the cryptocurrency market poses to consumers and financial markets. .

And last month, Boston Fed Chairman Eric Rosengren called the name of stablecoins “inappropriate,” adding that they can be volatile and pose risks to financial stability. Read more

The Fed is in the process of evaluating the universe of digital payments to determine whether it should issue a central bank digital currency, known abbreviated as CBDC.

Powell said this week that one of the strongest arguments for a CBDC is that it could reduce the need for multiple stablecoins or cryptocurrencies, but he made it clear he was not sure. let the Fed move in that direction.

“I am legitimately undecided as to whether the benefits outweigh the costs or vice versa,” said Powell.

Report by Jonnelle Marte; Editing by Andrea Ricci

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