According to Janet, authorities must respond to the rapid rise of stablecoins. The United States Secretary, Yellen, met with the President’s Task Force on Monetary Policy to examine stablecoins.
Yellen Issued a Warning to Regulators Regarding Stablecoins Yellen believes that authorities must act quickly to answer to the rise of stablecoins.
To examine the dangers posed by the developing stablecoin sector, the United States Secretary met with associates of the President’s Task Force on Monetary Policy and senior CEOs of the United States financial firms.
As per a press statement issued after speaking with the authorities privately, officials examined the possible use factors of stablecoins in transactions as well as the threats they represent to the nation’s monetary system and country’s security.
Among those who joined Yellen were Gary (Chairperson of SEC), Michael (Head of OCC and Acting Comptroller), Rostin (Acting Chairperson of CFTC), and lastly Jerome (Chairperson of the Fed Reserve).
Amidst the discussion, Yellen mentioned the urgency of acting fast to ensure a successful United States regulatory plan is implemented to reduce risks.
The President’s Task Force on Monetary Policy also informed the delegates of an impending study on stablecoins.
The study will highlight the potential advantages and dangers of dollar-based stablecoins, as well as provides proposals on what loopholes to fix in the present legal framework that are related to those concerns.
Both the United States Federal Reserve and Treasury have expressed worries regarding stablecoins over the last weeks, with Secretary Janet and Chairperson Jerome asking for proper restrictions. In comments well before Senate Committee last week, Jerome stated that the United States should adequately legislate stablecoins.
Stablecoins are privately-produced digital currencies that are linked with another commodity in a 1:1 ratio. Stablecoin requires the publisher to have the reserves supporting them in place and the majority of which are linked with the United States Dollar.
Stablecoins with a worldwide market cap of $110bn have been issued by several cryptocurrency and financial businesses. Tether, USDCoin, TrueUSD, GeminiUSD, and BinanceUSD are among the most popular stablecoins.
Over the previous year, the value of stablecoins has increased by ten folds. The fast development has alarmed authorities throughout the world, who say that stablecoins must be regulated to avoid becoming a form of funds volatility.