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President’s Working Group: Stablecoin Risks Warrant Legislation
For stablecoins, per analysis by the President’s Working Group on Financial Markets in its long-awaited report: Promise, yes. A bit of risk, too … so legislation is needed to ensure that only banks are in the mix to issue the coins, which, as widely noted and reported, are backed by dollars or other liquid, stable assets held in reserve, such as dollars.
In the report, released Monday, (Nov. 1), titled simply, “Report on Stablecoins,” the working group, in tandem with the Federal Deposit Insurance Corp. (FDIC) and the Office of the Comptroller of the Currency, said, “If well-designed and appropriately regulated, stablecoins could support faster, more efficient, and more inclusive payments options. Moreover, the transition to broader use of stablecoins as a means of payment could occur rapidly due to network effects or relationships between stablecoins and existing user bases or platforms.”