U.S. Treasury Department Targets Stablecoins in Latest Government Risk Assessment

The U.S. Treasury Department is targeting stablecoins in its latest regulatory risk assessment as officials see them as the most pressing risk. So read more on our latest crypto news.

With increasing regulatory pressures in the US, policymakers are putting stablecoins high on their agendas, as are US Treasuries.

Citing those with expertise, Bloomberg reports that officials have developed a new policy framework that will be released in the coming weeks. The main concern is to ensure that investors can reliably deposit and withdraw their funds into the token as it is added. Insiders fear that “the first sale of crypto assets could jeopardize financial stability and that certain stablecoins could scale quickly”.

The Financial Stability Oversight Council has prepared a formal review of whether stablecoins pose an economic threat, but officials are focused on how stablecoin transactions are handled and processed and whether market conditions have an impact. Tomicah Tillemann, global head of politics at a crypto fund led by Andreessen Horowitz, said:

“It is important and very important that we see the first steps in creating a regulatory framework for digital assets. That is a big problem. “

The report will be sent directly to the President’s Working Group on Financial Markets, which includes key agency leaders such as Treasury Secretary Janet Yellen, Fed Chairman Jerome Powell and SEC Commissioner Gary Gensler. Yellen also called for urgent regulation of stablecoins after alleging they were not being properly monitored. Gensler repeated the same opinion, stating that regulators need to protect investors from fraud. Michael Hsu, a Currency CEO, said regulators are reviewing Tether’s commercial papers to see if the USDT token is actually backed by US dollars.

Tether has given assurances that its reserves are fully covered but has yet to conduct an independent review. According to Tether’s transparency report, Tether remains the market leader with a $ 69.4 billion supply, close to the ATH for USDT, which hit 70 billion earlier this week. Of that, 36 billion, or 51.8%, are based on the Tron network, with 33.8 billion running on Ethereum and USDT supply up 232% since the start of the year. USDC, on the other hand, has $ 29.3 billion in circulation after growing 651% in 2021.

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