- The US treasury is preparing to introduce new regulations for Stablecoins.
- Per a treasury official, Nellie Liang, the regulators are willing to try their best to regulate the Stablecoins even if Congress does not.
The US treasury has hinted that there is a probability that they will introduce regulation for Stablecoins even if Congress does not cooperate. The treasury labels stablecoins as one of the biggest risks against the US economy.
One of the Treasury’s officials said that the organization is preparing to use its authority to ‘manage’ these coins. However, the Treasury relies on Congress for the legislation since it has limited power to regulate these Stablecoins.
The US plans to introduce laws to regulate Stablecoins
According to Liang, the Treasury has limited power when it comes to controlling the Stablecoins and still needs the support of Congress. She added that the organization could only do a few things regarding the coins. But if the regulations affect the stability of the coins, it will trigger big risks.
Stablecoins are critical in the crypto sphere since most people use them to enter and leave the market. USDT/ Tether is the largest stablecoin with a market cap of over $75B. This coin has faced criticism from the regulators on several occasions now.
Even though the Federal Reserve sees the Stablecoins as risky, its Chair, Jerome Powell, thinks these coins have more to offer. During the FOMC meeting on Wednesday, Powell said that Stablecoins could be useful due to their efficiency if they get proper regulation. However, he also noted that they are not regulated right now, making them ‘risky.’
The regulation of Stablecoins triggers mixed reactions
According to the regulators, if investors rush for Stablecoins, things would get ugly for the traditional currency. They fear that such a run may cause a cascade of failures to the world’s fiat currencies. Liang’s statement shows that the regulation of Stablecoins may not yet be unanimous between the Treasury and Congress.
Congress is also not in shape regarding the Stablecoins’ operation. The Senator of Massachusetts, Elizabeth Warren, labels these coins as a risk to the country’s economy. According to her, the regulators should do away with them as early as possible. Contrary to her views, Senator Pat Toomey of Pennsylvania thinks Stablecoins are exciting due to their efficiency and reliability.
Other organizations away from then government official has also made their statements regarding the regulation of Stablecoins. According to Alex Gladstein, the Chief Strategy Officer of Human Rights Foundation, Stablecoins are the bridge to the future of cryptos. He explained that these coins could help investors transact without a bank and possibly edge out other Altcoins.
Dylan Leclair, a BTC analyst, also notes that the regulation of Stablecoins is not good since it will limit the possible growth rates of these coins. He labels the Stablecoins as the collateral for bulls, and it is an aspect that the market needs.