Stable currency supervision situation: Digital Chamber of Commerce calls for no new rules, Facebook Novi pilot blocked

Summary:

  • The Digital Chamber of Commerce stated that stablecoins do not require separate regulations.
  • The US senator called on Facebook to stop launching Diem and Novi.

According to Reuters, The Chamber of Digital Commerce, a crypto advocacy organization in the United States, stated that stablecoins that focus on the retail market and are linked to the US dollar should not face new or specially formulated regulations “just because new technologies are being deployed.” .

The members of the Digital Chamber of Commerce include Goldman Sachs, Citigroup, Tether and  Circle . The organization stated that stablecoins are “small in scale” and are not worth establishing a “separate mandatory regulatory system.” Stablecoins should be treated like other retail-focused digital payment tools, rather than as an investment product. The organization also called for allowing well-regulated US stablecoin companies to use the Fed’s payment infrastructure.

As the Digital Chamber of Commerce made the above comments, stablecoin regulation and broader regulation of the crypto industry are still hot topics.

Stable currency supervision

The Digital Chamber of Commerce’s comments on stablecoins and regulation are inconsistent with other observers outside the crypto industry.

Earlier this week, Fitch Ratings, one of the three major credit rating agencies, issued a warning on stablecoins.

The agency said, “ Fitch Ratings believes that stablecoins that are close to the scale of systemic importance may play an important role in short-term securities markets such as commercial paper, and at the same time bring new risks to these markets.”

Fitch Ratings is not the only kind of encryption currency observers warn. US Treasury Secretary Janet Yellen (Janet Yellen) met with several federal agencies earlier this year to develop a regulatory approach to manage stablecoins. At the time, Yellen emphasized the need to “act quickly.”

Federal Reserve Chairman Jerome Powell (Jerome Powell) also believes that stablecoins need to be regulated. In his view, they should be subject to similar supervision as bank deposits and money market funds.

The Bank of England responsible for financial stability Vice President Jon Cunliffe (Jon Cunliffe) may not agree with the premise of a digital Chamber of relevant comments, that a stable currency is a small industry and not worth specially formulated regulations.

Earlier this month, Jon Cunliffe, speaking of the broader crypto industry, said that although cryptocurrencies account for a small share of the global financial system, they may trigger financial turmoil.

“Of course, US$2.3 trillion needs to be viewed in the context of the US$250 trillion global financial system. But as the financial crisis has shown us, you don’t have to account for a large proportion of the financial industry to cause financial stability issues. .”

US Senator calls on Facebook to stop launching Diem and Novi

David Marcus, the head of Facebook’s blockchain, tweeted yesterday that Facebook has begun to launch a small pilot of its Novi digital wallet in the United States and Guatemala . People can send and receive Paxos Dollars (USDP) instantly, securely and for free. Marcus expressed the hope that this will demonstrate a new use case of stablecoins as payment tools. It is reported that Coinbase Custody provides support for Novi to manage private keys through its proprietary and completely isolated cold storage capabilities to ensure the safety of user funds. Marcus also made it clear that Facebook’s support for Diem has not changed, and plans to launch Novi with Diem after Diem has obtained regulatory approval and goes live.

Stable currency supervision situation: Digital Chamber of Commerce calls for no new rules, Facebook Novi pilot blocked

Decrypt reported that in a letter on Tuesday, US Senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith urged Facebook CEO Mark Zuckerberg to immediately stop the Novi pilot and promised not to bring Diem to the market. . The senators stated, “When Facebook’s existing ability to manage risk and protect consumer safety proves to be completely inadequate, it cannot be trusted to manage payment systems or digital currencies.”

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/stable-currency-supervision-situation-digital-chamber-of-commerce-calls-for-no-new-rules-facebook-novi-pilot-blocked/
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