Speaking at the Brooking Institution today, Martin Gruenberg, head of the US Federal Deposit Insurance Corporation (FDIC), made statements about cryptocurrencies.
According to the FDIC chief, stablecoins can have a profound impact on the traditional banking system. Gruenberg stated that a series of duties fell on the US regulators to reduce the negative effects of this effect.
“US regulators should impose certain requirements for stablecoins for compliance that will not disrupt the digital currency (CBDC) system.”
The FDIC is a member of the US Banking Committee and this committee has significant influence in regulating stablecoins.
While the FDIC has recently increased its pressure on cryptocurrencies, Gruenberg’s statements were evaluated in this regard.
In particular, the increasing interest of US banks in cryptocurrencies and the fact that they offer crypto money services to their users with a new product every day fuels some of the concerns of the regulators.
He is a bit wary of licensing companies that lend in cryptocurrencies in the FDIC. Institution officials think that the recent collapse of many crypto lending companies supports this approach.
Gruenberg, who sees stablecoins as a risk to the traditional financial system, said Congress needed more regulation.
Noting that cryptocurrencies can create a “shadow banking” system, Gruenberg added:
“Developing the role of stablecoins in payment systems could fundamentally change banking.
Stablecoins will affect banks’ credit expansion and will likely make it harder for many US banks to survive.
This could form the basis for a potential form of “shadow banking” and pave the way for access to intermediary loans.”
Suggesting 3 ways to deal with stablecoins, Gruenberg stated that the following conditions should be met.
“Stablecoins should be issued through bank subsidiaries,
should be fully supported by short-term Treasury bills,
“Permissioned ledger system” should be adopted in accordance with the regulations.”
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