Biden Administration Takes Action for Stablecoins!

The Biden administration released a report Monday asking Congress to create regulations for stablecoins.

Stablecoins, cryptocurrencies tied to traditional currencies such as the US dollar, could be widely adopted, and a regulatory framework would increase confidence in the use of digital assets for payment purposes, the report said.

According to the President’s Financial Markets Working Group report, “If well designed and properly regulated, stablecoins can support faster, more efficient and more inclusive payment options.” But rules on stablecoins are “urgently needed” and “Congress should introduce specific laws such as only allowing banks to issue coins”.

The report also noted that failure to act puts the growth of stablecoins at risk. Besides, without stablecoin legislation from Congress, it was recommended that the Financial Stability Oversight Council consider designating certain activities as systematically significant. Eventually, this could lead the Federal Reserve to create stablecoin rules.

Biden has long worked with top economic advisers and senior regulators like Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell to propose rules regarding stablecoins. A separate report on digital currencies from the Fed is also expected soon.

Regulators are working on how to manage digital assets, with interest growing in recent months. Although stablecoins make up only a small part of the more than $2 trillion digital asset market, their rapid growth has caught the attention of regulators. It remains to be seen how the regulators will proceed.

source site