Law enforcement officials in the US see a need for action when it comes to regulating stablecoins. An announcement by Maxine Waters, chair of the relevant committee in the US House of Representatives, fits into this context. A virtual hearing on the subject of “Digital Assets and the Future of Finance: The President’s Working Group (PWG) on Financial Markets’ Report on Stablecoins” take place.
According to media reports, there is no list of participants yet. The hearing is on report by the US Treasury Department calling on Congress to limit stablecoin issuance to insured deposit-taking institutions.
To avoid risks for stablecoin users and prevent stablecoin runs, legislation should require stablecoin issuers to be insured depository institutions subject to appropriate oversight and regulation at the depositary institution and holding company levels. The legislation would ban other entities from issuing stablecoins
, so the wording of the report. However, this proposal is by no means undisputed. Classification of stablecoins as systemic risk would mean that the Financial Stability Oversight Council (FSOC) would have far-reaching emergency regulation powers.
New stablecoins law is considered unlikely
Its Republican member Patrick McHenry wrote to Waters earlier in the week, asking for more general clarity on cryptocurrencies, saying regulators have overstepped their bounds. However, it is considered very unlikely that the Senate will pass such a law before the midterm elections in November, as draft laws have already had an arduous path through the authorities.
Meanwhile, a group of US banks is working on its own US dollar-backed project. The aim is to eliminate any doubts. To this end, the consortium wants to work closely with regulatory authorities.
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