US Treasury Secretary Janet Yellen calls adoption of stablecoin rules “national security”

In an official statement, US Treasury Secretary Janet Yellen announced that she had convened the Presidential Working Group on Financial Markets to investigate stablecoins as “national security”.

US Treasury Secretary Janet Yellen calls adoption of stablecoin rules “national security”

The team includes key financial policy makers such as Jerome Powell, Chairman of the Federal Reserve (Fed) Board of Governors, Gary Gensler, Head of the Securities and Exchange Commission (SEC), Rostin Behnam, Acting Commodities President. Commodity Futures Trading Commission (CFTC), Jelena McWilliams, Head of the Federal Deposit Insurance Corporation, and Michael Hsu, Currency Control.

Powell and the Fed previously signaled their own willingness to put stablecoin-related rules in place, but a concerted effort could result in faster progress.

Yellen “stressed the need to act quickly to ensure that an adequate US regulatory framework is in place,” and the group “expects” to issue recommendations “in the coming months.”

The group, the statement went on, had “discussed the rapid growth of stablecoins, the potential use of stablecoins as a means of payment, and the potential risks to end users, the financial system and security.”

Jeremy Allaire, CEO and founder of Circle, the company behind the dollar (USDC), a large dollar-backed stablecoin, said the meeting was “very important”.

He added:

“Apart from the extreme academic positions, a consensus seems to be emerging that private digital currencies and stablecoins will persist and have the potential to go global. , the systemic parts of the economic and financial system. For the digital currency industry, this is an opportunity to encourage and engage and encourage constructive dialogue with key policy makers. “

He also took the time to “thank Presidents Joe Biden and Yellen for making this a national priority”.

Bloomberg, meanwhile, quoted Matthew Frankle, a partner in the Haynes & Boone law firm, who suggested that developments could indeed be positive for the sector. He said that “the main drive for regulators” will be to “increase consumer safety”. And while regulations “can lower the margins that issuers earn”, they have the potential to increase user numbers “in the long term”.

However, the lawyer added:

“There’s not a lot of information on how stablecoins work and what supports them.”

Many on Reddit rated the news positively, with one commenting that Tether (USDT) “is responsible for the bulk of the cryptocurrency trading volume” and wants the government to regulate it. “

Others agree that this will give legitimacy to the sector in the long run. However, some expressed skepticism about the prospect of increased regulatory scrutiny in the world of cryptocurrencies and stablecoins, arguing that increased regulation would damage the decentralized, limitless nature of the technology and the functions behind it.

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