U.S. Treasury Secretary Janet Yellen is meeting with President Biden‘s Working Group to discuss about stablecoin with regulators. In this meeting, the discussion of the "interagency work" on stablecoins will be happening.   The meeting will happen on July 19 to discuss the rapidly growing class of digital currencies that has been facing growing scrutiny from policymakers.

About the meeting:

Stablecoin is one of the popular digital currency which has been designed to be less volatile in nature other than cryptocurrencies as it pegs the market value to an outside asset like the U.S. dollar. The regulators are  quite concerned about the transparency that shall be maintained while the currency to be backed up.

To discuss on all this matter, today U.S. Treasury Secretary Janet Yellen is meeting President’s Working Group on Financial Markets. Also, there will be representatives from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation.

U.S. Treasury Secretary Janet Yellen will meet Monday with the President’s Working Group on Financial Markets, Office of the Comptroller of the Currency and FDIC to discuss the role of stablecoins in the financial system.

While commenting on the meeting, Yellen stated, “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.” She further added, “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.”

Regulators concern on the change:

Earlier in the same year, Visa started supporting the payment on the network which shall have the dollar back with stablecoin USD Coin. There has been quite many risks and benefits of stablecoins.

Considering both the aspects, regulators have raised some concerns associated with stablecoins trading transparency. The concern on how well the market participants should be relying on it for trading has been still a major concern.

As the interest and popularity has increased The President’s Working Group on Financial Markets are discussing on the same.

Shivangi Mujumdar

CBW - External Analyst

INDIA