The President’s Working Group for Monetary Markets, a presidential advisory group, plans to problem suggestions about stablecoin rules throughout the subsequent few months, it introduced Monday.
In accordance with a readout revealed by the U.S. Treasury Division, the extremely anticipated assembly examined stablecoin development, use instances and attainable threats. The assembly was first introduced on Friday, capping off a current rise in consideration on stablecoins and their position within the cryptocurrency economic system.
“The group additionally heard a presentation from Treasury workers on the preparation of a report on stablecoins, which might talk about their potential advantages and dangers, the present U.S. regulatory framework, and the event of suggestions for addressing any regulatory gaps,” the readout mentioned.
Federal Deposit Insurance coverage Corp. Chairwoman Jelena McWilliams, Performing Comptroller of the Foreign money Michael Hsu, Treasury Underneath Secretary for Home Finance J. Nellie Liang and Federal Reserve Vice Chairman for Supervision Randal Quarles joined Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, Securities and Trade Fee Chairman Gary Gensler and Performing Commodities Futures Buying and selling Fee chief Rostin Behnam throughout the assembly.
The assembly got here simply days after Federal Reserve legal professional Jeffery Zhang (writing in a private capability and never for the Fed) and Yale College economist Gary Gorton revealed a paper saying stablecoins might pose a systemic danger to the monetary system.
The paper likened stablecoins to the wildcat banks of the 1800s, pointing to a scarcity of insurance coverage, the danger of financial institution runs and the possibilities of a stablecoin shedding its peg when a consumer tries to redeem or spend it.
It’s unclear when particularly the Treasury Division intends to publish its suggestions, or whether or not it’s going to focus extra on congressional motion or company rulemaking.
“The Secretary underscored the necessity to act rapidly to make sure there’s an acceptable U.S. regulatory framework in place,” Monday’s readout mentioned.