U.S. treasury secretary urges regulators to "act quickly" on stablecoin regulation

Jul 20, 2021

National
U.S. treasury secretary urges regulators to "act quickly" on stablecoin regulation

Washington (US), July 20: U.S. Treasury Secretary Janet Yellen on Monday urged financial regulators to "act quickly" on the regulation of stablecoins, a type of digital currency that is pegged to the U.S. dollar.
"The Secretary underscored the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place," the U.S. Treasury Department said in a statement following a meeting of the President's Working Group on Financial Markets.
"In the meeting, participants discussed the rapid growth of stablecoins, potential uses of stablecoins as a means of payment, and potential risks to end-users, the financial system, and national security," the Treasury Department said, adding the President's Working Group expects to issue recommendations in the coming months.
The meeting came after Federal Reserve Chair Jerome Powell told lawmakers last week that the United States doesn't have appropriate regulation for stablecoins, compared with bank deposits and money market mutual funds.
"They're like money funds, they're like bank deposits, and they're growing incredibly fast, but without appropriate regulation," Powell said at a congressional hearing.
"If we're going to have something that looks just like a money market fund or a bank deposit or a narrow bank and it's growing really fast, we really ought to have appropriate regulation and today, we don't," he said.
In a financial stability report released in May, the Fed had warned that stress in the financial system could further interact with potential risks from new digital payment systems, including stablecoin arrangements.
"These associated risks may require additional safeguards, and regulators are monitoring these developments," the report said.
Source: Xinhua