Treasury Secretary Janet Yellen announced plans to gather the nation’s top regulators on Monday for a meeting to discuss a stablecoins, the Treasury Department said Friday.
“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,” Secretary Yellen said in a statement. “In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”
Federal Reserve Chairman Jerome Powell, Securities and Exchange Commission Chairman Gary Gensler, and Commodity Futures Trade Commission Acting Chairman Rostin Behnam will also attend the meeting.
Stablecoins are a type of digital currency that attempts to maintain a peg to the U.S. dollar. They are popular with investors in bitcoin
and other cryptocurrencies, because their stable value makes them useful for trading in and out of other typically volatile digital assets.
Critics of stablecoins say they pose significant risks to financial stability, especially after it was revealed that some of these dollar-pegged tokens are not backed by actual U.S. dollars, but a combination of riskier assets. In February, the New York State Attorney General Letitia James banned the use in New York of a stablecoin called Tether
and an associated crypto exchange, Bitfinex, for making false statements about the currency’s backing.
On Wednesday, Powell said in a congressional hearing that regulators need to apply rules to stablecoins that are similar to those that govern bank deposits and money market mutual funds.