After several weeks of upheaval in the cryptocurrency market—including prominent stablecoins like TerraUSD and USDD breaking their U.S. dollar pegs—Treasury Secretary Janet Yellen reiterated her call for a regulatory framework for stablecoins.
According to a Treasury readout after a meeting of the President’s Working Group on Financial Markets, “Secretary Yellen emphasized how recent events have underscored the urgent need to ensure that stablecoin arrangements are subject to a federal framework on a consistent and comprehensive basis.” The meeting also included the heads of the FDIC, OCC and CFPB, Treasury said, adding that Yellen “commended the steps that individual agencies have taken within the scope of their mandates and authorities.”
According to the readout, Yellen “highlighted the need to continue to constructively engage in serious legislative efforts to promptly put in place a regulatory framework for stablecoins that would address current and future risks, such as those related to runs, safety and soundness, consumer protection, the payment system and the concentration of economic power, while complementing existing authorities with respect to market integrity, investor protection, and illicit finance.”
ABA has called on policymakers to address gaps in federal regulation of stablecoins and to ensure consistent treatment of banks and nonbanks that engage in stablecoin activity. “ABA believes that customers who choose to access digital asset markets, including stablecoins, will be best served when they can do so through fully regulated banks where they are afforded robust consumer protection,” the association said in statement for the record to the House Financial Services Committee in February.