As regulators become increasingly aware of the fast-developing class of cryptocurrencies, the United States secretary Janet said on Friday she would have a meeting with officials to talk about the cooperation of interagency on stablecoins.
The President’s Task Force on Capital Markets will meet with the Branch of the Department of the Treasury and the FDIC on Monday to debate the risks and benefits of stablecoins, which is a form of digital currency that is anchored toward more conventional assets such as fiats like USD.
Yellen stated in her statement: Drawing regulators together will allow us to evaluate the possible advantages of stablecoins at the same time minimizing the dangers they may bring to consumers, businesses, or the banking markets.
Authorities keep a close eye on everything.
Stablecoins and the rest of the digital currencies are being intensively scrutinized by lawmakers, Fed Reserve authorities, as well as other regulators as digital currencies gain more popularity and new potential options flood in.
According to the Government, the task force will investigate the present regulation of cryptocurrency, identify vulnerabilities, and make proposals for mitigating such risks and they will issue a formal recommendation within the upcoming months.
Concerns about Powell regulation
In committee testimony this week, Powell, Federal Chair, noted that cryptocurrencies are rapidly increasing, but he raised concerns about the lack of proper legislation.
Powell verified: Unless we intend to get something that appears almost exactly like a bank deposit or a financial industry fund, we need to have proper regulation, which we don’t yet have.
Senator Elizabeth, just last week, requested SEC’s Gary to report the digital currency industry’s dangers to customers and monetary markets.
In general, the growing popularity of stablecoins has resulted in large amounts of USD-equivalent tokens being moved without even entering the USA’s financial system, potentially blinding authorities to criminal behavior.
Digital money issued by a central bank
The market capitalization of stablecoins supported by the USD has increased dramatically in the last few months, exceeding $100b in May. Authorities have chastised Tether for not having the assistance it claims to provide.
The Fed Reserve is currently analyzing the online payments ecosystem to determine if it would issue a CBDC. As per Powell, among the most convincing reasons in favor of a Central Bank Digital Currency is it can reduce any need for multiple stablecoins or digital currencies. Nonetheless, he stated that the Federal is not quite sure if it will pursue this route or not.