Asset-backed “stablecoins” are not a risk to the US financial system and should not be subjected to new rules, said the main lobby of the cryptocurrencies to regulators now that tighter oversight of this fast-growing sector looms.
These stablecoins – digital ‘tokens’ generally backed by dollar reserves or assets from gold to other cryptocurrencies – have exploded during the COVID-19 pandemic.
As a result, the Presidential Task Force on Financial Markets – which includes major U.S. regulators, including the Treasury and the Federal Reserve (Fed) – is targeting them as part of its increased efforts to control cryptocurrencies. .
The group is expected to publish a report detailing the risks and opportunities of stablecoins in the coming months.
In a letter to the group seen by Reuters, the Washington-based Chamber of Digital Commerce said that dollar-pegged, retail-focused stablecoins should not be subject to a new set of rules “simply because it is being implemented. new technology”.
Stablecoins “are not on a significant scale to merit a separate mandatory regulatory regime,” he noted, adding that they should be treated like other retail-focused digital payment tools, and not an investment product.
Members of the Chamber include banks Goldman Sachs Inc Group and Citigroup Inc, and crypto companies such as Circle, which issues the second largest stablecoin, USD Coin. Hong Kong’s Tether, which issues the largest stablecoin, is not part of the group.
The signatories say stablecoins could revolutionize payments by avoiding bitcoin volatility and offering the same speed and low cost advantages. However, they are used more for crypto trading than payments, and their growing size is attracting the attention of financial watchdogs.
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