Biden admin weighing bank-like regulation for stablecoin issuers
The Biden administration is reportedly contemplating a brand new authorized framework for stablecoin issuers that might put them in the identical class as banks, elevating questions on the way forward for crypto regulation within the nation.
Citing folks conversant in the matter, The Wall Street Journal reported Friday that the administration is trying to persuade Congress to create a brand new “special-purpose charter” for stablecoin issuers and different corporations that fall throughout the identical class. Although it’s not fully clear how the laws will look, it’s anticipated to be tailor-made particularly to these kind of enterprise fashions.
Policymakers have been sounding the alarm over stablecoins in latest months as a result of they consider these dollar-pegged belongings aren’t correctly regulated. Earlier this week, Federal Reserve Chairman Jerome Powell informed the Financial Services Committee that stablecoins like Tether (USDT) and USDC Coin (USDC) ought to be regulated throughout the identical parameters as cash market funds like financial institution deposits. Nevertheless, he remained steadfast in stating that no blanket ban on Bitcoin (BTC) or different digital belongings was within the playing cards.
As Cointelegraph reported in July, joint analysis by the Fed and Yale University outlined two regulatory frameworks for stablecoins in a 49-page paper referred to as, “Taming Wildcat Stablecoins.” In that paper, the authors argued that policymakers have solely two decisions with respect to stablecoin rules: make them equal to public cash or tax them out of existence by way of central financial institution digital currency.
Related: US Treasury reportedly in talks for stablecoin regulation
Stablecoins — digital currencies which are wholly or partly pegged to a type of fiat cash just like the U.S. greenback — have swelled to develop into a $128 billion market, according to the newest market capitalization figures. Tether accounts for over half of the whole market, although opponents akin to USDC and Binance USD (BUSD) have made vital headway this yr. As these markets have grown, considerations over the liquidity and reserve standing of stablecoin issuers have made eye-grabbing headlines.
After reaching a settlement with the Office of the New York Attorney General, Tether Holdings Ltd. agreed to publish periodic studies proving its currency reserves. In May of this yr, the corporate disclosed its full reserve breakdown for the primary time.