During the market of stablecoins, the Treasury Department of the United States has reportedly debated over the required regulation regarding the stablecoins. Several meetings have been conducted by the Treasury to check for the potential risks of utilizing stablecoins by the financial system, markets, or the consumers, as well as the benefits thereof to move ahead toward the regulation, as reported by Reuters on 10th September.
John Rizzo (the spokesperson of the Treasury) stated that the Department of Treasury is conducting a meet-up with a large number of stakeholders such as consumer advocates, market participants, and congress members. The report cited three resources being acquainted with the matter, each of which was anonymous, and mentioned that one out of the meetings of Treasury was conducted last Friday and the officials asked the community of cryptocurrency about the need for a straightforward oversight at the time when it would turn into a widely adopted currency.
They are also reported to have discussed the way the regulators should alleviate the threats in the case of a lot of people’s decision to extract all of their respective holdings in stablecoins at the same time and the requirement for the support of prominent stablecoins via traditional assets. The officials of the Treasury also recently contacted a team of credit unions and banks to sort out the potential regulation of stablecoins. A source from Reuters revealed that the authorities were gathering information without sharing their thoughts about the procedure of regulating the stablecoins.
In the matter of the market of stablecoins, comparably greater attention has been witnessed on the behalf of the Treasury that has led to a significant upsurge in the stablecoins’ value during the last year. The noticeable stablecoins’ cumulative market capitalization including USDC (USD Coin) and USDT (Tether) has crossed the position of $125B which is much greater than $37B in January. Several companies doing traditional finance such as MasterCard (a payment giant) have reaffirmed their promise to back the solutions regarding stablecoins. In this regard, Visa has claimed that stablecoins are proving to become digital fiat.
The news followed the statement of Elizabeth Warren (a U.S. Senator) who expressed that the industry of cryptocurrency is the latest shadow bank signifying that it is amplifying its vital importance. Formerly, Janet Yellen (the Treasury Secretary of the United States) pushed the authorities to quickly take action for the establishment of a framework of regulation for stablecoins.