Home
News
- Because the stablecoin market has grown at an exponential rate from $21.5 billion in mid-October last year to $130 billion at the start of November this year
- The study urged that Congress act quickly to adopt legislation requiring payment stablecoin issuers to be regulated similarly to banks in the United States. Stablecoins could only be issued by companies that are guaranteed depository institutions, in other words
- Salman Banaei, head of policy at cryptocurrency intelligence firm Chainalysis, told in an interview that if the proposed legislation were passed and signed into law a big if given the current legislative stalemate in Washington
Because the stablecoin market has grown at an exponential rate from $21.5 billion in mid-October last year to $130 billion at the start of November this year, a six-fold increase it was only natural that the US government would have to grapple with these digital assets that are designed to maintain a stable value relative to a fiat currency like the US dollar or a commodity like gold. With the release of the much-anticipated President’s Working Group on Financial Markets (PWG) report on Stablecoins this week, the Treasury Department published its most recent thoughts on the matter.
The study urged that Congress act quickly to adopt legislation requiring payment stablecoin issuers to be regulated similarly to banks in the United States. Stablecoins could only be issued by companies that are guaranteed depository institutions, in other words. Surprisingly, the study received little opposition from the business. Perhaps the crypto community was just happy that the government did not want to outright outlaw stablecoins.
However, the research did raise some concerns. What impact would such legislation have on the global stablecoin market if it is passed, could it, as some in the crypto community have predicted, impede innovation, or could it, on the other hand, provide regulatory clarity to a market where a lack of oversight has deterred institutional investors, businesses, and even individual investors from investigating crypto alternatives.
ALSO READ: THE NEXT BIG THING MIGHT BE DECENTRALIZED SPACE STORAGE
Salman Banaei, head of policy at cryptocurrency intelligence firm Chainalysis, told in an interview that if the proposed legislation were passed and signed into law a big if given the current legislative stalemate in Washington its provisions would put current bank-backed stablecoins like JPM Coin in a prime competitive position versus non-bank stablecoin issuers.
Although clearly not a fan of stablecoins, Sidharth Sogani, CEO of crypto research firm CREBACO Global, inclined to agree. No one wants to possess a stablecoin until they have to book a profit. Also, with more investment options available, like as ETFs, he believes individuals are limiting their exposure to stablecoins.
The PWG Report presents one model of how to open this gateway’ to new, more efficient, and competitive ways of delivering financial services, Banaei said, adding, The PWG Report presents one model of how to open this gateway to new, more efficient, and competitive ways of delivering financial services.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
