US Regulators focus on Stablecoins
According to a press release from The US Treasury, who note the Presidents Working Group on Financial Markets (PWG) will meet. The PWG includes heads of the Federal Reserve, the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Yellen commented “Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,”. About a one minute read.
Comment: you might wonder why this public fuss over a segment of the cryptocurrency market which is sized at roughly $100B. Well, its obvious they’re concerned about what in tech we call “first mover advantage”; WHEN (note I didn’t say IF) The US unveils and deploys a digital dollar, aka CBDC, why would anyone use if if they’re already using Stablecoins such as Tether, TrueUSD or USD Coin? Answer — they wouldn’t. A digital dollar wouldn’t be needed. SO they’re likely to try to kill Stablecoins.
UPDATE: late Monday news was alight with this drama:
Gotta wonder what the panic is all about.
UPDATE: this was released about 2100 EST
Its still not clear why this is such an issue for them; we’re talking about a relatively small segment of the entire cryptocurrency market, about $100B valuation.
Ultimately, they really can’t control this. Sure, any US domiciled issuer could be compelled / shut down, but in that environment offshore would thrive. All this attention will do is drive the development of a stablecoin with strong privacy features (e.g, Monero or ZCash); best for the regulators to approach the community in a cooperative and conciliatory manner.
But I doubt they will.