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They pressure the US Congress to regulate stablecoins

Key facts:

US government agents believe the use of stablecoins as a means of payment will increase.

US Senators Announce Support for Debating Stablecoin Regulation in Congress.

Three US government officials warn that stablecoins – stablecoins – could become a common means of payment in the future. They are the Federal Deposit Insurance Corporation (FDIC), the Office of Currency Control (OCC), and the President’s Financial Markets Task Force (PWG).

In a report released Monday, November 1, Janet L. Yellen, the Secretary of the United States Department of the Treasury, stated that “stablecoins that are well designed and subject to proper supervision have the potential to support beneficial payment options. ».

So far, stablecoins are mainly used to facilitate the trading of other digital assets. They are a type of digital asset generally designed to maintain a stable value in relation to the dollar or other fiat currency, unlike cryptocurrencies, such as bitcoin, which are characterized by their volatility.

According to these United States government agencies, the use of stablecoins for traditional payments could soon increase, both at the individual and institutional level. This would only depend on a regulatory effort to mitigate the risks involved.

US Concerns to Increase Use of Stablecoins as Payment

Although the representatives of the United States mentioned they are open to the increase of stablecoins as a traditional payment method, express some concerns. Janet L. Yellen argues that “the absence of adequate supervision presents risks to users and the system in general.”

Janet L. Yellen is convinced that stablecoins should be regulated by the United States Congress. Source: Twitter.

That is why, in the report on stablecoins, the agencies state that urgently await the cooperation of both parties in Congress to legislate the activity. They point out that agreements subject to a federal framework should be established to prevent illicit finance and protect the integrity of the market and investors.

Among their recommendations, they advise, in the first place, that stablecoin issuers should be required to be insurance depository institutions, that is, to function like banks. Second, digital wallet providers would have to respond to federal oversight. And thirdly, limitations should be put in place on the affiliation of commercial entities and the use of user transaction data.

The agencies end the report by saying that, while the analysis focused on stablecoins, will continue to work to foster responsible financial innovation for all digital assets. This would involve the cryptocurrency industry, such as bitcoin, an issue that, for example, is already being discussed in the Colombian Congress, as revealed by ..

In response to the report, Senators Cynthia Lummis, Pat Toomey and Sherrod Brown have already expressed their support to address the issue in Congress soon. Precisely the latter, who is a political ally of Janet L. Yellen and President Joe Biden, said: “We must work to ensure that any new financial technology is subject to all laws and regulations.”

Brown also added that stablecoins must be legislated to compete on an equal footing with traditional financial institutions. Toomey, on the other hand, was open to debate “if federal agencies have jurisdiction over stablecoins and, if so, to what extent”, which could give the sector more freedom.

About the author

Donna Miller

Donna is one of the oldest contributors of Gruntstuff and she has a unique perspective with regards to Science which makes her write news from the Science field. She aims to empower the readers with the delivery of apt factual analysis of various news pieces from Science. Donna has 3.5 years of experience in news-based content creation, and she is now an expert at it. She loves journalism, and that is the reason, she moved from a web content writer to a News writer, and she is loving it. She is a fun-loving woman who has very good connections with every team member. She makes the working environment cheerful which improves the team’s work productivity.

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