Treasury Secretary Yellen Asks US Regulators Overseeing Crypto Assets to 'Act Quickly' to Regulate Stablecoins

U.S. Treasury Secretary Janet Yellen has asked the regulators overseeing crypto assets to “act quickly to ensure there is an appropriate U.S. regulatory framework in place” for stablecoins.

• U.S. Department of the Treasury’s Office of Public Affairs announced Monday the outcome of the meeting of the President’s Working Group on Financial Markets (PWG) which Treasury Secretary Janet Yellen convened to discuss stablecoin regulation.
• The meeting, which took place Monday, was joined by the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation (FDIC).
• “In the meeting, participants discussed the rapid growth of stablecoins, potential uses of stablecoins as a means of payment, and potential risks to end-users, the financial system, and national security,” the announcement details, adding:

The Secretary underscored the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place … The PWG expects to issue recommendations in the coming months.

• The meeting was attended by Yellen, Fed Chairman Jerome Powell, SEC Chairman Gary Gensler, CFTC Acting Chairman Rostin Behnam, FDIC Chairman Jelena McWilliams, Acting Comptroller of the Currency Michael J. Hsu, Fed Vice Chair Randal Quarles, and Treasury’s Under Secretary for Domestic Finance J. Nellie Liang.
• Regulators worldwide are increasing their efforts to regulate stablecoins. The Bank of England, for example, has said payments made with stablecoins should be regulated in the same way as payments made by banks if they become widely used.
• A growing number of regulators see stablecoins as posing financial stability risks, unlike cryptocurrencies such as bitcoin. ECB President Christine Lagarde said in November last year that stablecoins, such as the Facebook-backed crypto, could pose “serious risks.” If widely adopted, “they could threaten financial stability and monetary sovereignty,” she said.
• Last week, Fed Chairman Powell claimed that you would not need stablecoins or cryptocurrencies if you had a digital U.S. currency.