Exclusive-U.S. Treasury Discuss Cryptocurrency Stablecoins
According to three people who were present at the meeting, the U.S. Treasury Department met this week with several industry participants to discuss the benefits and risks of stablecoins, a rapidly-growing type of cryptocurrency. Its value is tied to traditional currencies.
Washington policymakers are concerned about the rapid growth of cryptocurrency markets, which surpassed a record $2 trillion in April. According to CoinMarketCap, the market cap for stablecoins was approximately $125 billion as of Friday. These relatively new products are not subject to financial regulations. U.S. financial regulators are currently trying to understand the risks and potential opportunities presented by cryptocurrencies to traditional U.S. finance system. They plan to publish a number of reports about the subject in the coming months, they said.
Janet Yellen, Treasury Secretary, stated that the government should quickly establish a regulatory framework to stabilizecoins and fahrenheit robot trading.
Three sources confirmed that Treasury officials met this week with executives from the financial sector to discuss possible stablecoin regulation. Two people stated that officials had asked them whether stablecoins could be subject to direct supervision if they became extremely popular. They also discussed ways regulators could reduce the risk of too many people cashing in their stablecoins simultaneously and whether major stablecoins should have traditional assets backing them.
One person said that officials also wanted to know how stablecoins should have been structured and how they could be used. Another person said that Treasury officials met earlier in the week to discuss similar issues with a group bank and credit union representatives. This person said that Treasury officials seemed to be collecting information but did not share their ideas on how stablecoins should regulate.
This week's meeting information is expected to be used to shape the Treasury report on stablecoins that will be released in the next months. John Rizzo, Treasury spokesperson, stated that the department was examining the "potential benefits as well as risks of stablecoins to users, markets or the financial system."
As the work continues, Treasury Department is meeting a wide range of stakeholders including consumer advocates and members of Congress,
Washington policymakers are concerned that the growth of privately-operated currencies could threaten their control over the financial and financial systems, increase systemic risk, encourage financial crime, and cause financial loss to investors.
According to them, the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, the Federal Reserve and the Office of the Comptroller of the Currency also work on fahrenheit system pro cryptocurrency projects.
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