Finance Minister Yellen urges lawmakers to quickly issue guidelines on stablecoins

US Treasury Secretary Janet Yellen has told financial regulators that the government must act quickly to put in place a regulatory framework for stablecoins.

The comments were made at the meeting of the President’s Working Group on Financial Markets on Monday. The group discussed the rapid growth of stablecoins and revealed plans to issue regulatory recommendations in the coming months, according to Reuters.

The team also looked at stablecoins as a means of payment, potential risks to end users and their wider implications for the US financial system and national security.

In February, Yellen warned that crypto asset misuse, along with the cyber attacks caused by the global pandemic, was a growing problem. At the time, she recognized the promise of these new technologies but also cautioned against her vision of reality, saying that “Cryptocurrency has been used to launder the profits of online drug dealers. they are an instrument for financing terrorism. “

Circle Co-Founder and CEO Jeremy Allaire called the meeting “very important” and noted that stablecoins will stay here and potentially become an important part of the economic system and global finances:

“It is extraordinary and positive that US financial leaders are doing this right now. It’s an indication of how far we’ve come and how quickly it’s all happening. “

The 1/14 meeting is VERY important today as the meeting of the President’s Working Group to discuss the proper policy and oversight of private stablecoins is taking place. There is a lot to be said about this @SecYellen, @ Federal Reserve and @USOCC Team.

– Jeremy Allaire (@jerallaire) July 19, 2021

The growth in stablecoins has been monumental this year as the demand for decentralized funding has increased. Circle’s USDC has done its best this year with circulating supply up 577% to a record $ 26.4 billion, according to CoinGecko.

Similarly, Federal Reserve Chairman Jerome Powell also stressed the need to put in place a strong regulatory framework for stablecoins last week.

“If they are to become an important part of the payments universe, we need a proper regulatory framework, which we frankly don’t have,” he said.

Connected: Fed President Says Stablecoins Need More Regulation, Talks About CBDC

As Cointelegraph reported earlier this month, the world’s most popular stablecoin, Tether, is still under scrutiny. On June 25, Boston Federal Reserve Bank President Eric Rosengren issued a warning regarding Tether’s basket of currencies.

When total stablecoin supply hit $ 100 billion in May, it sparked concerns among financial regulators about the lack of oversight in the sector, including uncertainty about how stable token issuers are managing their reserves.