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US congress convene to discuss stablecoin

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TL;DR Breakdown

  • US Congress set to hold talks on stablecoin regulation with crypto stakeholders.
  • Meeting called a fact finding mission to determine next step on stablecoin regulation.

The US Congress (Senate Banking Committee) is set to hold a meeting on Tuesday, Dec 14, discussing stablecoins. This is as scrutiny continues to heighten on stablecoin regulations.

The meeting titled “Stablecoins: How Do They Work, How Are They Used, and What Are Their Risks?” will see chief executives of six cryptocurrency companies testify before the committee about the promises, perils, and uses of stablecoins, or cryptocurrencies that are pegged to the value of stable assets such as the dollar.

Brian Brooks, the former acting comptroller of the currency under President Donald J. Trump and now the chief executive of the blockchain technology company Bitfury Group; Sam Bankman-Fried, the chief of the crypto exchange FTX; Alesia Haas, Brian Armstrong, the chief of Coinbase’s exchange in the United States; and Jeremy Allaire, the chief of the payments company Circle are some of those who would also testify before the committee.

Purpose of US congress meeting on stablecoin

The meeting called by Maxine Waters of California, the committee’s Democratic chairwoman, is part of a crypto “fact-finding mission” that will help members determine what steps to take next on stablecoins and other cryptocurrency issues, a committee aide said to The New York Times.

He declined to provide a timeline for potential legislative action but acknowledged the possibility it could be imminent, given the concern and urgency expressed by financial regulators.

Polity around stablecoin regulations continue to heighten in US

This hearing by the US Congress members could nail down the ongoing debate around stablecoins as there has been a long-standing argument on the risky nature of stablecoins in the US. Last month, the US Treasury Department published a report on the risks related to stablecoins, claiming that they threaten consumer protection and economic stability.

In early November, the Treasury Department also eyed stablecoins, recommending that they were subject to “appropriate federal oversight.” The President’s Working Group also released a report on stablecoins recently calling on lawmakers to restrict their issuance to banks.

Stablecoin supply has increased recently as more are minted by Tether and the like. According to CoinGecko, stablecoin market capitalization is at a record high of $160 billion. Tether accounts for almost half of that, or 48%, with a record 77 billion USDT in circulation.

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