The US government’s long-awaited stablecoin report has been released

The US government’s long-awaited stablecoin report has finally been released with a proposed policy solution. So read more on our latest crypto news today.

SEC chairman Gary Gensler announced that the US government has finally finalized its stablecoin report. The report outlines the risks associated with these tokens and gives Parliament further recommendations on how to deal with them. The Financial Markets Working Group prepared the report in collaboration with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. The report outlines some of the potential benefits of stablecoins, such as using payment options faster and more efficiently.

However, it harbors many of the risks that stablecoins pose to the financial markets, including their use for speculative trading in cryptocurrencies or the loss of confidence in their capital preservation. Tether is the one who receives this criticism the most. There are also concerns about their use in illicit financial activities and money laundering. To combat this mandate, the report therefore promoted an internationally collaborative approach:

“An important factor in reducing the risk of illegal funding, regardless of the design characteristics of stablecoins, is international standards for the regulation and supervision of related service providers for stablecoins and other digital assets that are effectively implemented around the world.”

The long-awaited Stablecoin report claims that due to the increase in liquidity, these assets have the potential to scale rapidly on illicit payment networks. Fed chief Jerome Powell advised similarly, calling Bitcoin a failed currency because of its high volatility. To guard against some of these concerns, the report argues that the law requires issuers to be insured by custodians and also points out that crypto wallet providers are subject to government scrutiny. Finally, the article addresses issues of centralization and calls for restrictions on the connection of stablecoins to commercial entities.

The final concern is that Tether has received a lot of criticism regarding its association with Bitfinex. Both companies faced $ 40 million fines a month ago for lying about Stablecoin Tether’s involvement. The report concludes that stablecoin regulation is urgently needed:

“If you don’t do this, you risk steady growth in payments without adequate protection for users, the financial system, and the economy in general.”

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