U.S. Treasury Secretary Janet Yellen said during a meeting of the presidential working group on financial markets that a regulatory framework for stabilecoins needs to be established quickly.
Regulators plan to issue recommendations in the coming months to address regulatory gaps regarding stablocoins. At a meeting of the presidential working group on financial markets, regulators discussed the potential use of stablocoins as well as the risks to users and the financial system.
A stabelcoin is a digital coin whose value is tied to a specific physical asset. The first such currency-linked digital currency, USDT from Tether, appeared in 2015. It is pegged to the value of the US dollar at a ratio of 1:1.
Last week, US Federal Reserve Chairman Jerome Powell, speaking before the House of Representatives, called for stablcoin to be extended to bank deposits and mutual funds rules
On July 19, Nobel laureate in economics and member of the American Philosophical Society Paul Krugman predicted a stablcoin crisis. According to Krugman, stable digital coins are a modern version of free banking, where private banking organizations issue their own banknotes backed by real coins.