B Bitcoin

US Financial Regulators Warn Stablecoins Need More Supervision

24 December, 2020
Digital Yuan




 

Yesterday, the President’s Working Group on Financial Markets, whose members include the heads of the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC), the Federal Reserve, and the Treasury Department, released a statement focusing on key regulatory and supervisory considerations for participants in stablecoins.

 

The statement highlighted that stablecoins, that traders rely on to facilitate payments for digital tokens, should be used in a manner that “effectively manages risk and maintains the stability of the U.S. domestic and international financial and monetary systems.” Amoing other details, it pointed that “the operators of stablecoins should have “strong reserve management practices include ensuring a 1:1 reserve ratio and adequate financial resources to absorb losses and meet liquidity needs.

 

According to Bloomberg, “The document released by the group of Trump-appointed officials is the latest move by the administration to apply longstanding financial rules to the fast-growing world of crypto finance.Earlier this month, the G7 discussed “ongoing responses to the evolving landscape of crypto assets and other digital assets and national authorities’ work to prevent their use for malign purposes and illicit activities.