Stablecoin supervision is imperative: Biden government intends to conduct bank-style supervision of stablecoins

On Monday, a report issued by the Biden administration stated that stablecoins are digital assets linked to traditional currencies that can change the way Americans pay. The President’s Financial Markets Working Group stated that when regulated, stablecoins can “support faster, more efficient and more inclusive payment options”.

The report reads: “Due to network effects or the relationship between stablecoins and existing user groups or platforms, the transition to the wider use of stablecoins as a means of payment may happen quickly.” Nonetheless, Biden’s economic adviser Said that Congress must introduce regulatory supervision and a formal market structure as soon as possible to protect investors, issuers and exchanges at the same time and provide them with information.

Specifically, the Biden Financial Markets Working Group recommended that Congress pass legislation to restrict the issuance of stablecoins to insured banks . Doing so can give government agencies (including the Federal Deposit Insurance Corporation and the Federal Reserve) greater jurisdiction over their operations, risk management, and a better understanding of the overall health of the industry.

After the US Treasury Department released the stablecoin report, Fed Chairman Powell expressed his support for calling for the establishment of a stablecoin regulatory framework. US Senator Toomey urged Biden not to expand the law to regulate stablecoins.

Senator Cynthia Lummis said: “I agree with many suggestions, including Congressional legislation and the need for prudent risk management, but the suggestion that only depository institutions can issue stablecoins is misleading and wrong. I worry that this suggestion will only make Big banks benefit and restrict innovation. We should all agree that startups should have the same opportunities as Wall Street institutions. But as the report clearly states, Congress will have the final say.”

Sherrod Brown, Chairman of the Senate Banking Committee, said: “Today’s report highlights the risks that the rapid growth of stablecoins bring to households and the economy. We must work hard to ensure that new financial technologies comply with all laws and regulations that protect investors, consumers, and the market. At the same time, ensure that they have a level playing field with traditional financial institutions.”

Despite calls for legislative action, government officials pointed out that discussions with Capitol Hill are still in the early stages.

It is worth noting that the U.S. Treasury Department previously authorized the U.S. Securities and Exchange Commission (SEC) to take the lead in overseeing stable currency markets such as Tether.

Posted by:CoinYuppie,Reprinted with attribution to:
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