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Regulators demand Congressional action on stablecoins

Frustrated with the lack of a regulatory framework in the cryptocurrency markets, the President’s Working Group on Financial Markets, along with the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency, published a report on stablecoins.

The report, which concludes that Congressional action “is urgently needed to address the prudential risks inherent in payment stablecoins” highlights risks relating to: (i) stablecoin ‘runs’ if there’s a lack of confidence in the instrument, (ii) systemic risks inherent in reliance on a small number of stablecoins or stablecoin issuers, (iii) the lack of a consistent regulatory framework, and (iv) the potential for money laundering and terrorist financing. The report also outlines several interim measures the agencies intend to take pending Congressional action.