According to a report from the President’s Working Group on Financial Market, if the U.S. lawmakers do not take any steps, regulators would be forced to take their actions.
Some regulators in the United States requested lawmakers to use the exact strict federal oversight on stablecoin issuers as banks in a much-awaited report released on November 1.
The President’s Working Group for Financial Markets mentioned in the report that Congress should direct a federal agency to regulate custodial wallet providers. According to the report, the interactions of stablecoin issuers and non-financial businesses such as telecom or tech providers should be also limited.
Are policymakers apprehensive about stablecoins?
The new report is believed to be an effort by policymakers to control the 138 billion USD segment of the crypto market to minimize the threats they feel stablecoins present to the financial system, markets, and consumers.
Cryptocurrencies or stablecoins fixed to the value of another asset like the American dollar have witnessed unprecedented growth over the last couple of years irrespective of lingering apprehensions about their backing.
Nellie Liang, Treasury Under Secretary for Domestic Finance for Domestic Finance told CoinDesk that there is a need for a framework, which is innovative, not so inconvenient, and offers protections.
Congress failing to pass laws such as this basically means the regulatory agencies have the power to take their steps. At the same time, the group indicated that it would not want that to happen. Liang mentioned that they believe in the importance of the legislation. However, it would not be astonishing that the existing regulatory framework cannot address some new risks this could present.