Secretary of the Treasury Janet Yellen Convenes Group to Discuss Stablecoins

The Secretary of the Treasury Janet L. Yellen has announced plans to convene the President’s Working Group on Financial Markets (PWG) to discuss the hot topic of Stabelcoins. The PWG meeting, which will include the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, will meet Monday, July 19.

Secretary Yellen stated:

“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system. In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”

In December 2020, the PWG published the “Statement on Key Regulatory and Supervisory Issues Relevant to Certain Stablecoins.” This forthcoming meeting will discuss the regulation of stablecoins including possible risks and recommendations to manage any risk. Written recommendations will follow later this year.

More recently, the Chairman of the Federal Reserve has commented on the need to regulate stablecoins. Fed Chair Jerome Powell said this week that a digital dollar, or Central Bank Digital Currency (CBDC) may preclude a need for stablecoins.

Popular dollar-based stablecoins include Tether, USDC, and Binance USD. Tether currently holds a market cap of over $62 billion. Stablecoins are frequently used for easy onboarding and off-ramping within crypto markets.

In addition to the Secretary of the Treasury, the PWG members are the Chair of the Board of Governors of the Federal Reserve System, the Chair of the Securities and Exchange Commission, and the Chairman of the Commodity Futures Trading Commission.

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