THELOGICALINDIAN - The Presidents Working Group on Financial Markets has recommended abrupt and absolute authoritative legislation
A highly-anticipated address from the President’s Working Group on Financial Markets was appear today. The address apprenticed abrupt aldermanic activity to extend federal blank to the rapidly-growing stablecoin market.
PWG Urges Stablecoin Regulation
The President’s Working Group on Financial Markets (PWG), in affiliation with Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), has appear a report on stablecoins advising that Congress exercise its ample aldermanic ability to adapt the arising and aegis of stablecoins in the United States. The address was published beforehand today by the U.S. Department of the Treasury.
The address has recommended “that Congress act promptly to achieve legislation to ensure that acquittal stablecoins and acquittal stablecoin arrange are accountable to a federal prudential framework on a constant and absolute basis.”
In accession to accepted AML/CFT concerns, the address identifies three accurate risks to the civic absorption airish by an able stablecoin market: the accident airish by “stablecoin runs,” the risks associated with the adherence of stablecoins as a acquittal system, and the systemic accident of “concentration of bread-and-butter power.”
To abate the accident of alleged “stablecoin runs”—a academic scenario, called for real-world coffer runs, in which depositors all attack at already to redeem their stablecoins for banknote alone to acquisition that the arising article does accept abundant to awning the demand—the address recommends legislation acute stablecoin issuers to be “insured archive institutions,” which are accountable to “appropriate administration and regulation.”
To abode the additional capital affair involving the adherence of stablecoins as a acquittal system, the address recommends that Congress empower federal authorities to crave “any article that performs activities that are analytical to the activity of the stablecoin adjustment to accommodated adapted risk-management standards.” This would entail acquiescence to federal oversight.
The third primary affair listed in the address is the accident of “concentration of bread-and-butter power,” which the address suggests mitigating by acute stablecoin issuers “to accede with activities restrictions that absolute amalgamation with bartering entities.”
The address urges alert activity on account of Congress, writing:
“The accelerated advance of stablecoins increases the coercion of this work. Failure to act risks advance of acquittal stablecoins after able aegis for users, the banking system, and the broader economy. In contrast, a authoritative framework that supports aplomb in acquittal stablecoins, in accustomed times and in periods of stress, could access the likelihood of stablecoins acknowledging benign payments options.”
In accession to requesting Congressional activity apropos the adjustment of stablecoins, the address additionally asserts that “stablecoin arrange and activities may accuse the administration of the SEC and/or CFTC,” autograph that:
“Stablecoins, or assertive genitalia of stablecoin arrangements, may be securities, commodities, and/or derivatives. Moreover, abundant of the trading, lending, and borrowing action currently fueled by stablecoins on agenda asset trading platforms and aural DeFi analogously may aggregate balance and/or derivatives affairs that charge be conducted in acquiescence with federal balance laws…”
While it urges Congressional advantage to abode stablecoin arrangements, the abode warns that, in the meantime, these agencies “will abide to use their absolute authorities to abode these prudential risks to the admeasurement possible.”
Disclaimer: At the time of writing, the columnist of this allotment endemic BTC, ETH, and several added cryptocurrencies.
