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- Janet Yellen will sit with the President’s Working Group to discuss stablecoins
- The secretary of the United States Treasury believes that stablecoins are less fluctuating than other cryptocurrencies
- Transparency of cryptos and the emerging DeFi sector are concerning the financial regulators
- Yellen believes that for booming virtual currencies, it is significant for the authorities to collaborate and regulate the sector
Janet Yellen is the secretary of the United States Treasury. She sees Bitcoin as a highly inefficient way of conducting transactions. Moreover, she considered crypto assets as a high speculative form of assets. However, it seems like the secretary of the US Treasury is quite impressed with the concept of stablecoins. This week, Yellen will be meeting the Working Group of the President on Financial Markets. The meeting is held to discuss the roles of stablecoins in the financial ecosystem.
Janet Yellen believes stablecoins are less fluctuating
The meeting with the President’s Working Group will be held on Monday. Janet Yellen will be talking about the dollar-pegged digital currency. These types of assets are pegged with government-issued fit currencies. Hence, Yellen believes that such coins are less fluctuating than other cryptos.
According to Yellen, monetary regulators will enable us to assess the potential benefits of such fiat-pegged coins while mitigating the risks they could pose to users, markets, or the financial system. In contrast to the booming virtual currencies, it is significant for the authorities to collaborate to regulate the sector.
Regulators are concerned about cryptocurrency
Janet Yellen has noted that financial regulators are concerned about the cryptosphere. Notably, transparency in the changing hands of stablecoins is one of the main concerning factors. Hence, the collaborations will help for the development of any recommendations for new authorities.
Emerging DeFi sectors is another concern
The cryptosphere has witnessed how stablecoins and the booming decentralized finance (DeFi) sectors are soaring in terms of interest. Since the beginning of this, the DeFi industry has shown tremendous growth. Moreover, in May’s turbulence period DeFi was the only sector that indicated positive sentiments.
Following the scenario, it is also noteworthy that VISA announced that it is about to start to support payments on its USDC network at the beginning of this year. Janet Yellen believes that such announcements are the fact that the soaring industry requires regulations more than ever. Indeed, more and more institutions are going public or preparing to go public like Coinbase.
Stablecoins requires an appropriate framework
On the one hand, Janet Yellen is planning to discuss stable crypto tokens. But, on the other hand, Jerome Powell, the Chairman of the Federal Reserve, highlighted that such assets require an appropriate framework. Indeed, such a framework will help fiat-pegged cryptocurrencies in their operations before the Senate Banking Committee.
