In recent times Stablecoins has emerged as the hottest crypto entity and thirsted over by investors. Nevertheless, this recent pursuit of popularity has caught the interest of regulatory and legislative bodies as well. The President’s advisory board on the financial market’s affairs said that the main agenda at the meeting is to discuss stablecoins. The meeting is reportedly scheduled for July 19th.
The U.S. Federal Reserve Chairman Jerome Powell, Head of Security and Exchange Commission Gary Gensler, and Acting Chairman of Commodity Futures Trading Commission, Rostin Behnam are also invited to the meeting. The United States Federal division has previously spoken on the matter and demanded that strict regulations must be imposed on stablecoins. However, The U.S. Department of Treasury told that all the heads of the financial committee will attend the meeting scheduled for Monday. The heads will analyze stable coin regulation and risks.
The Presidential Advisory body is tasked with analyzing the post corona U.S. financial markets. The Treasury Secretary, Janet Yellen briefed the press that strict regulations will protect the consumer market and mitigate any risks posed by stablecoins. However, the government is still analyzing the benefits of crypto assets so the implication of any strict regulation can be a time taking process.
The rapid growth of the crypto market demands authorities to come up with detailed regulations to make it transparent, safe, and more fruitful for society. Federal regulatory authorities can’t allow people to play in the hands of some of the world’s biggest crypto exchanges.
It is expected that the advisory group will publish detailed recommendations about the crypto sector in near future. The U.S. Advisory Group has already published its initial draft about the regulation of stablecoins back in December. However, the draft was strictly focused on retail payments and deemed public opinion on how that payment is used. Thus, the first document was not detailed enough to jump to any conclusions. But the expected draft will be much detailed than the previous one. However, the December draft worried users about the risks stablecoins pose to consumers. The main concern was the volatility of the market. When it comes to the crypto market, the market integrity and overall stability are constant concerns for the consumer, investors, and government.
Even though stablecoins are famous for their fast payment systems and central bank digital currencies attributes, the risk attached with digital tokens is far greater. A strict and broader set of regulatory implications should be imposed. It will mitigate financial misconduct and reduce the financial risks involved in it. This legislation will focus on digital token transfers, bank deposits, and the exchange of commodities. On the other hand, Stablecoins officials labeled this news as hype to damage crypto market goodwill in the market.