US Senator Cynthia Lummis, one of the most ardent supporters of cryptocurrencies on Capitol Hill, said stablecoins should be backed by fiat currencies and issued by banks.
The politician on Wednesday in the Senate Hall noted: “Perhaps we will come to the point where stablecoins can
release only banking institutions, investment funds or similar financial institutions ”.
A call from an ardent supporter of cryptocurrencies like Senator Lammis to tighten control over the stablecoin market suggests that the clouds are gathering more and more over the US crypto industry. If the government is looking for opportunities to control low-volatility stablecoins backed by fiat currencies, then it becomes clear that the authorities will use every opportunity to slow down the development of the cryptocurrency market. Regulators worry that stablecoins are not sufficiently controlled and do not guarantee a bank level of protection to users. The US Treasury Department is already preparing a report on whether stablecoins pose an economic threat. The next step is the report of the Financial Stability Supervision Board. If the government decides that stablecoins are analogous to a traditional financial product, then they will face stricter regulation.
In 2019, the Fed announced that the stablecoin crisis could wreak havoc on the global economy.
Unlike the US, which is still looking for ways to regulate stablecoins, the EU has opposed the use of stablecoins without reliable regulation.
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