The financial working group of the US government has indicated that Stablecoins must meet certain regulatory standards to be accepted in the country. This comes after the controversial stablecoin bill that has been proposed by US lawmaker Talib Rashid.
More Clarity On Stablecoins
The working group published an extensive report on Wednesday highlighting its views on stablecoins. According to the report, stablecoin must meet appropriate money-laundering and oversight requirements.
The working group also believes that in situations where stablecoins are accepted for retail payments, firms must include additional financial safeguards. It further encouraged financial stakeholders involved in the development of stablecoins to embark on proper financial principles that would align the currencies to existing regulations.
These principles include risk management, stablecoin arrangement and functions among others. The working group also proposed that U,S regulators should coordinate among each other and with international partners to ensure that they are kept abreast with the latest developments within the stablecoin space.
Acting Comptroller of the Currency Brian Brooks believes that the group had reached a productive balance on the issue of stablecoins.
“In its wisdom, the group also remained agnostic regarding the technologies related to unhosted wallets, which helps the nation remain competitive by preserving industry’s ability to innovate in responsible ways and adapt to the market and consumer needs and preferences,” Brooks said.
The financial working group is an important body and is tasked with overseeing and nurturing the U.S financial markets. The group includes Treasury Secretary Steven Mnuchin, Federal Reserve Chair Jerome Powell, Securities and Exchange Commission Chair Jay Clayton and Commodity Futures Trading Commission Chair Heath Tarbert.
Stablecoins Remains A Major Concern For Regulators
Stablecoins remain a major source of concern to regulators who have turned towards proposing laws to regulate the stablecoin market. Due to their relative stability in price and cross-border capabilities, stablecoins pose a greater risk to fiat currencies than Bitcoin and Ethereum which are famed for their high volatility.
Corporations like Facebook have faced difficulties in convincing regulators about the legality of their stablecoins. this forced Facebook to rebrand its stablecoin from Libra to Diem. This was followed by the controversialproposed by Congresswoman Rashida Tlaib in association with other representatives. 2021 promises to bring more clarity towards stablecoin.