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Treasury, regulators discuss path forward for stablecoins

WASHINGTON — Biden administration officials met with U.S. financial regulators Monday to discuss a path forward for regulating stablecoins in light of the rapid growth in the digital asset space.

At the meeting, Treasury Secretary Janet Yellen urged meeting participants to “act quickly to ensure there is an appropriate U.S. regulatory framework in place” to address the risks associated with stablecoins, according to a statement from the Treasury Department.

While few details were made available about the issues discussed at the meeting, the Treasury Department said that staffers gave a presentation in preparation of a report on stablecoins — a type of digital currency that is pegged to normal currency such as the U.S. dollar — that the president’s working group on financial markets plans to release in the upcoming months.

“In the meeting, participants discussed the rapid growth of stablecoins, potential uses of stablecoins as a means of payment, and potential risks to end-users, the financial system, and national security,” Treasury said in a press release.

“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,” said Treasury Secretary Janet Yellen in a press release last week.

Bloomberg News

The meeting comes as U.S. officials have been increasingly worried about the risks posed by the exchange of stablecoins, and their potential use for money laundering. The Fed is also considering the possibility of issuing a U.S. digital dollar.

“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,” Yellen said in a press release last week. “In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”

The working group includes Yellen, Federal Reserve Chair Jerome Powell, Securities and Exchange Commission Chair Gary Gensler and Commodity Futures Trading Commission Chair Rostin Behnam.

Fed Vice Chair of Supervision Randal Quarles, Federal Deposit Insurance Corp. Chair Jelena McWilliams, Acting Comptroller of the Currency Michael Hsu and Undersecretary of the Treasury Nellie Liang were also in attendance at the meeting Monday.

Powell also told the House Financial Services Committee last week that stablecoins should be regulated to bring their standards in line with bank deposits and money market funds.



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