September 20, 2021
Stablecoins – digital tokens usually backed by reserves of dollars or assets from gold to other cryptocurrencies – have ballooned during the COVID-19 pandemic. As a result, the President’s Working Group on Financial Markets – which comprises top US regulators including the Treasury and Federal Reserve – is focusing on them as part of wider efforts to rein in crypto.
In a letter to the group seen by Reuters, the Washington- based Chamber of Digital Commerce said retail-focused stablecoins pegged to the dollar should not be subject to a new set of rules “simply because new technology is being deployed”.
Stablecoins are “not at significant scale to merit a separate, compulsory regulatory regime,” it said, adding that they should be treated like other retail-focused digital payment tools, and not as an investment product. The Chamber’s members include Wall Street banks Goldman Sachs Inc Group and Citigroup Inc as well as crypto companies such as Circle, which issues the second-biggest stablecoin USD Coin. Hong Kong-incorporated Tether, which issues the largest stablecoin, is not part of the group.
In the United States, stablecoins are subject to a patchwork of state-based rules as well as oversight from some federal agencies. US Treasury Secretary Janet Yellen told regulators in July the government must move quickly to establish a regulatory framework for stablecoins. Opposing a new set of rules, the chamber also called for “well-regulated” US stablecoin companies to have access to Federal Reserve payments infrastructure.
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