The upcoming CBDC report by the Treasury, the Fed, and other financial regulators is focused on laying down strict rules on the undetected risk factors underlying stablecoins.
According to the New York Times, the Financial Stability Oversight Council has the mandate to systematically designate stablecoins as a risky financial system, so it’s possible for regulators to create stricter policies. According to the upcoming CBDC report, the reviews by the council are thought to be close to putting a possible pressure on stablecoins. According to officials, since stablecoins are largely unregulated, they are concerned that they may create instability rather than ultimately protect the financial system.
It is thought that Chairman Gensler’s approach towards stablecoins includes controversial securities comments and this comment will be included in the report. Gensler recently made headlines about the claim that stablecoins “can be securities”. The fact that this comment will be included in the report has been interpreted as that stable coins can be considered as securities in the future. It is one of the comments in the press that if stable coins are considered securities, all these units will have to register with market regulators and will be forced to give up anonymity by complying with the rules of the regulators.
Stable Coin Accounts in Banks
Another point included in the policies regarding the regulation of stablecoins was the possibility that stablecoin accounts could be treated like a bank. As many institutions continue to demand cryptocurrency (stable coin) bank accounts from banks, it is thought that regulators may set up stablecoins as bank accounts. If regulators make a similar move, it is believed that this move will reduce the risk factor of stablecoins and help protect investors.
“If this regulation occurs, the tokens could be subject to the oversight of a bank regulator such as the Currency Supervisory Office,” Gelzinis said. It is also thought that investors could potentially benefit from deposit insurance should the company backing stablecoins go bankrupt.