Treasury Secretary Janet Yellen speaks during the daily press conference on May 7, 2021 in the Brady Briefing Room of the White House in Washington, DC.
Saul Loeb | AFP | Getty Images
US Treasury Secretary Janet Yellen will meet with the President’s Working Group on Financial Markets next week to discuss the role stablecoins could play in the financial system.
The meeting will take place on Monday and will include representatives from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, the Treasury Department said on Friday.
Stablecoins are digital currencies that are less volatile than other cryptocurrencies by pegging their market value to an external asset such as the US dollar.
“Bringing regulators together will allow us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets or the financial system,” Yellen said in a statement on Friday. “With the rapid growth of digital assets, it is important that authorities work together to regulate this sector and develop recommendations for new authorities.”
Regulators are increasingly concerned about the transparency of trading stablecoins, the reserves they support, and how much market participants rely on them to enable trading in decentralized finance, also known as DeFi. They gain popularity and interest. Earlier this year, Visa announced it would support payments on its network in the dollar-backed stablecoin USD coin.
As more and more companies with cryptocurrency businesses go public or prepare to go public, such as Coinbase and Circle, the industry needs more regulatory clarity around stablecoins. Speaking to the Senate Banking Committee on Thursday, Federal Reserve Chairman Jerome Powell admitted that stablecoins would need “an appropriate framework”.