certify
Home arrow Article arrow Article Detail

U.S. financial regulators seek to handle Stablecoins

Profile Image

Joyashree Dey Follow

INDIA

Sep, 21 2021

Sep, 21 2021

likes | comments 0

Article Image

According to New York Times, the rush to bring “systemically risky” stablecoins under regulatory control might be “the most important conversation in Washington financial circle this year.”

Despite having a link to government currencies like the US dollar, stablecoins are built more like “risky investments” and are currently under-regulated. “Stablecoins have moved from virtual nonexistence to a more than $120 billion market in a few short years, with the bulk of that growth in the past 12 months,” the article claimed.

US regulators seeking the matter of stablecoins might be a huge shift in the crypto market. On one side, stablecoins’ regulation could add to investor comfort and grasp the market value surge. On the other side, its regulations could make investors feel overly controlled which could decrease investments in the newly emerging industry.

According to the Washington regulators, stablecoins aren’t necessarily currencies or commodities, which are subject to a lesser amount of hostile regulation than securities or derivatives. They further stated: "Depending on its design and other factors, a stablecoin may constitute a security, commodity, or derivative subject to the U.S. federal securities, commodity, and/or derivatives laws."

Treasury Deputy Secretary Justin Muzinich announced, “The statement reflects a commitment to both promote the important benefits of innovation and to achieve critical objectives related to national security and financial stability."

As the NY Times article suggested, there are five ways of regulation that could be used to control stablecoins. Those are by designating the stablecoins as “systemically risky” or as “maybe well securities”, treat them as money market mutual funds or as banks; and issue them as CBDC (Central Bank Digital Currency).

However, no matter what path the US regulators take, they can’t go it alone. The stablecoins couldn’t just move elsewhere with international cooperation or stablecoin regulation. Such international regulation will probably come in 2023 when the global Financial Stability Board is targeting the final adoption of stablecoin regulations it’s working on, the Times predicted.

Acting Comptroller of the Currency Brian Brooks stated this matter, "The group reached a productive balance recognizing the valuable and important role stablecoins are playing in our national and global economies and the need to ensure such financial tools do not contribute to crime or national insecurity."


likes | comments 0

Profile Image

Joyashree Dey

CBW - External Analyst

INDIA

Comments
Data Centre Construction - World First artificial intelligence AI-Tech Utility Token
banner
Article
EMG launched a super app based on blockchain technology

EMG launched a super app based on blockchain technology to bring users a portfolio of communication services through a single mobile platform The Emeldi Group, a top supplier of e-commerce solutions.;

Disclaimer: The information is for informational purposes only.​ This advertisement does not constitute financial advice or any other advice. You should consult with a financial professional to determine what may be best for your individual needs. None of the information and/or content available through this advertisement is intended as an offer or solicitation of an offer to buy or sell, or as a recommendation, endorsement, or sponsorship of any company, financial product, security or commodity. To the maximum extent permitted by law, we disclaim any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable or result in any investment or other losses. In Making the investment decision, investors must rely on their own examination of the issuer and the terms of the offerings, including the merits and risks involved. Investments are speculative, illiquid, and involve a high degree of risk , including the possible loss of investment.