The Biden administration is trying to regulate stablecoin issuers as if they were banks – including by encouraging firms to register as banks, The Wall Street Journal reported.
The White House is also considering asking Congress to propose legislation to create special-purpose statutes specifically tailored to these firms, sources told The Journal. A special purpose statute would subject companies to federal oversight rather than state-by-state laws.
The management’s recommendations, although still a work in progress, will be included in a Treasury-led report scheduled for release in late October. The highly anticipated report is expected to highlight potential risks and provide a framework for a federal approach to the stablecoin system. Also among the authors of that report are Secretary of the Treasury Janet Yellen, Federal Reserve Chairman Jerome Powell, and Gary Gensler, Chairman of the Securities and Exchange Commission, who recently compared stablecoins to poker chips. Powell also recently said that stablecoins are similar to money market funds that need to be regulated.
The report may also suggest that the Financial Stability Oversight Council (FSOC) take a closer look at stablecoins. But sources told the Journal that this was not the administration’s “preferred approach.”
Stablecoins are digital tokens pegged to traditional currencies like the US dollar that trade just like BTC and ETH. They make up a small portion of the $2 trillion digital asset market, but have managed to grab the attention of regulators due to their rapid growth. It is a matter of curiosity whether there will be a regulation for stablecoins from the USA.