The nation’s top financial regulators met Monday to discuss stablecoins, with Treasury Secretary Janet Yellen emphasizing “the need to act quickly to ensure there is an appropriate U.S. regulatory framework in place,” for these digital assets, the Treasury Department said in a release.
The participants discussed stablecoins, a type of digital currency that is pegged 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. Popular stablecoins include tether
Topics of discussion included “the rapid growth of stablecoins, potential uses of stablecoins as a means of payment and potential risks to end users, the financial system and national security,” the Treasury Department said.
Critics say stablecoins pose a threat to financial stability, because investors use them as cash substitutes, but they remain lightly regulated, unlike similar products like bank deposits or money market mutual funds. Last week, Federal Reserve Chairman Jay Powell said in a congressional hearing that regulators should treat stablecoins similarly to these instruments.
Attending the meeting were Yellen, Powell, Securities and Exchange Commission Chairman Gary Gensler, Acting Chairman of the Commodity Futures Trading Commission Rostin Behnam, Federal Deposit Insurance Corporation Chairman Jelena McWilliams, Acting Comptroller of the Currency Michael Hsu, Under Secretary of the Treasury for Domestic Finance Nellie Liang and Randal Quarles, Vice Chairman at the Fed in charge of supervision.