U.S. Treasury Officials, Financial Executives Meet to Discuss Stablecoins Regulations

A series of meetings attended by U.S. Treasury Officials and financial executives was held this week to discuss stablecoins, regulations, and their benefits. According to some reports, the attendees considered enacting some laws to regulate the use of stablecoins in the country and talked about other financial topics regarding the industry.

Issues Discussed in the Various Meetings Held

Policymakers across the finance industries became alarmed by the growing virtual currency market, which stands at $2 Trillion. The market capitalization of stablecoins, a fast-growing digital asset, stands at $125B. At the moment, no one knows if these new products are financially regulated or not, and this was the reason for holding meetings last week.  

Experts worry that the rise in stablecoins and other privately-run cryptocurrencies will disrupt monetary systems and maximize financial risks. In addition, they have raised an alarm that the coin will promote crime and damage investments. These were some of the issues raised during the meetings held this week. 

In one of the various meetings held, the Treasury officials discussed the possibility of directly overseeing stablecoins if demand for them increased beyond expectation. In addition, the officials analyzed how regulators could limit the risks crypto poses to the traditional financial structure and whether significant stablecoins should have support from traditional assets. 

In the one held on Friday, industry officials discussed the best way to minimize the risk of many people cashing out simultaneously, and whether the current system can support stablecoins sufficiently. Earlier this week, officials from the Treasury met with bank reps to discuss regulating stablecoins and the framework to be used. According to the attendees, they will release reports of their conclusions in subsequent months.

U.S. Treasury Examining Stablecoins

According to the various reports from sources, Treasury Spokesman revealed that the department is observing the potential benefits and risks of stablecoins to the users and more importantly, to the traditional financial structure. John Rizzo said that the department would continue to meet with stakeholders, financial experts, and legislators to discuss the best way of regulating the coins. Rizzo also revealed that the SEC, the Federal Reserve, CFTC, and the OCC are on it.

There have been calls to develop a regulatory system for cryptocurrency use in the country. This led the SEC to strengthen its pursuits of crypto platforms. Last week, the SEC warned Coinbase from launching its Lend Program, citing the danger of the high yield program. While cryptocurrency basks on decentralization, there’s still the need to enforce some regulations to protect investors.