Tomorrow the President's Working Group on Financial Markets will meet with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation to discuss the benefits and risks of stablecoins.
Public domain photo
Yellen stated:
"Bringing regulators together will allow us to assess the potential benefits of stablecoins and mitigate the risks they may pose to users, markets, or the financial system."
The market value of stablecoins backed by the U.S. dollar has increased significantly in recent months, surpassing $100 billion in May. Tether, the largest, has come under fire from authorities for not always having the support it claims to have.
The working group will "review the current regulation of stablecoins, identify risks, and develop recommendations to address those risks," according to Treasury, and intends to "issue written recommendations in the coming months."
Powell's concerns about regulation
During congressional hearings this week, Fed Chairman Jerome Powell said stablecoins are "growing incredibly fast," but expressed qualms about their lack of proper regulation.
Last week, U.S. Senator Elizabeth Warren asked SEC Chairman Gary Gensler to address the cryptocurrency industry's threats to consumers and financial markets.
In general, the growing scale of stablecoins has created a situation where massive amounts of dollar-equivalent coins are being transferred without ever hitting the U.S. financial system.
The Federal Reserve is now examining the digital payments landscape to see if it could issue a central bank digital currency, abbreviated as CBDC. One of the most compelling arguments in favor of a CBDC, according to Powell, is that it could minimize the need for different stablecoins or cryptocurrencies. However, he also indicated that the Fed isn't sure about going that route.
Market analysis
The release of GBTC does not seem to have had the catastrophic effects predicted by some commentators, just a slight increase in downside volatility.
I remind you that this week, on July 21, the "B World" will take place, a virtual conference in which Elon Musk and Jack Dorsey will also take part, an event that could also trigger movements.
Smoke and mirrors
Despite the positive and negative narratives, what matters is the data, and as we have already shown in previous articles, there are very clear movements taking place.
Written by Gunto
Sources
DISCLAIMER
We are not giving any financial advice regarding cryptocurrencies, but rather giving applicable advice for new, intermediate and experienced people who are currently into cryptocurrencies or someone who is just now realizing what it is. Before you read this I must say that this blog will be based on the assumption that you have already done some research on cryptocurrencies and the Blockchain ecosystem. We will continue to provide explanations and details to the best of our ability, however we encourage you to do your OWN research because only YOU will know how this second financial revolution will best fit into your life. Thank you for reading our contents.
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News source: https://finbold.com/u-s-regulators-meet-to-discuss-stablecoins-tomorrow/
Our analysis is original.
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