U.S. Treasury Secretary Janet Yellen announced that she will meet with regulators today to discuss “interagency work” on stablecoins, a rapidly growing class of digital currencies that is facing growing scrutiny from lawmakers. The President’s Working Group on Financial Markets will meet today with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to go over the benefits and risks of stablecoins.
Regulators will assess the risks and benefits of stablecoins.
“In light of the rapid growth in cryptocurrencies, it is important for the agencies to collaborate on the regulation of this growing sector and the development of any recommendations for new authorities,” The U.S. Treasury Secretary said in a statement, noting it was important for regulators to assess the potential benefits of stablecoins while also “mitigating risks they could pose to users, markets, or the financial system.” Stablecoins and other digital payments options receive more attention from lawmakers, Federal Reserve officials, and other policymakers as new options emerge and gain traction.
Regulators are concerned about the growing popularity of cryptocurrencies.
Earlier, Federal Reserve Chair Jerome Powell told lawmakers during congressional hearings that stablecoins are “growing incredibly fast” but pointed to their lack of appropriate regulation as a point of concern. “If we’re going to have something that looks just like a money-market fund or bank deposit … we really ought to have appropriate regulation, and today we don’t,” Powell said. U.S. Senator Elizabeth Warren had also sent a letter to Securities and Exchange Commission (SEC) Chair Gary Gensler last week asking him to address the risks the cryptocurrency market poses to consumers and financial markets. Elizabeth Warren had earlier lashed out on crypto, calling them lousy and bogus investments.