The US President’s Financial Markets Working Group discussed the regulation of stablecoins. The group will release guidelines for regulating stable cryptocurrencies in the coming months.
Treasury Secretary Janet Yellen met Monday with executives from several US federal agencies to discuss stablecoin regulation.
The closed meeting of the US President’s Financial Markets Working Group was also attended by Fed Chairman Jerome Powell and US Securities and Exchange Commission (SEC) Chairman Gary Gensler. Other participants included the heads of the Commodity Futures Trading Commission (CFTC), the Federal Deposit Insurance Corporation (FDIC), and Treasury officials, including Michael Hsu, Director of the Office of the Comptroller of the United States of America (OCC).
According to the meeting summary, Yellen “stressed the need to act quickly to ensure there is an appropriate US regulatory framework” for stablecoins. According to CoinGecko, the three largest US dollar-pegged stablecoins – USDT, USDC and BUSD – have a combined market capitalization of over $ 100 billion. Their growing popularity worries US regulators.
Powell said last week that stable cryptocurrencies should be regulated like bank deposits and money market mutual funds. During the meeting, the SEC and CFTC chairs had little to say about the regulation of stablecoins. The SEC mainly focuses on the regulation of investment contracts that carry an implicit or explicit promise of future profits. Stablecoins, on the other hand, do not imply a rise in price.
Stable cryptocurrencies also do not fall under the definition of commodities, the regulation of which falls within the purview of the CFTC. However, their use in the broader cryptocurrency market to buy other cryptoassets or hold money during market volatility has an impact on the finance industry as a whole. This very issue was discussed at the meeting of the target group.
“Participants discussed the rapid growth of stablecoins, their potential use as a means of payment, as well as potential risks for end users, the financial system and national security,” the report says.
The group intends to issue recommendations on regulation of stablecoins “in the coming months”.