Holders of stablecoins should be able to freely convert tokens into the assets they backed. This requirement is contained in the recommendations developed by the US Treasury Department for issuers of stablecoins, writes Bloomberg, citing sources.
Topics covered include how transactions involving stablecoins are processed and calculated, and how market conditions affect this process.
The document reflects efforts to mitigate the risks associated with the redemption of stablecoins and “banking panic”, which could destabilize the financial system as a whole. Officials are worried about the sector’s rapid growth in capitalization and the possibility of issuing tokens like Facebook’s Diem.
Sources did not rule out the consideration of the situation by the Financial Stability Oversight Board for the presence of economic threats from stablecoins. This could lead to even stricter regulation.
In September, Treasury officials discussed the risks and benefits of stablecoins with representatives from the banking community and credit unions.
In July, a meeting of the US President’s Working Group on Financial Markets took place. The participants discussed the rapid growth of stablecoins, their use as a means of payment, as well as potential risks for end users, the financial system and national security.
Earlier, the head of the US Federal Reserve System Jerome Powell questioned the need for stablecoins. He compared stablecoins to money market funds and savings banks.
In August, the Consortium Center, issuing USDC, announced its intention to transfer the token reserves into dollars and treasury bills.
The issuer of stablecoin USDT Tether Limited in a July report indicated that the share of cash and bank deposits that can be withdrawn in two or less days was about 10%.
The Pax Dollar (formerly Paxos Standard) company Paxos has affirmed 100% backing of each USDP and BUSD issued by the US dollar and its equivalents.
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