The House Committee on Financial Services will hold a virtual hearing tomorrow (February 8) with a single witness scheduled to testify.
The hearing entitled, “Digital Assets and the Future of Finance: The President’s Working Group on Financial Markets’ Report on Stablecoins” will involve the testimony of The Honorable Nellie Liang, Under Secretary for Domestic Finance, U.S. Department of the Treasury,
The hearing memorandum notes that as of February 3, 2022, stablecoins reached an estimated $174 billion in market capitalization. Although stablecoins represent a small fraction of the digital asset industry’s total value they facilitated more than 75% of trading on all digital asset trading platforms. The memorandum highlights certain risks regarding stablecoins, including a run-on-the-bank-like scenario that could roil crypto markets.
The document mentions Liang’s recent comments regarding the need for Congressional action, quoting her supporting legislation to create statutory rules for stablecoins.
Liang’s submitted testimony reviews stablecoin risks as well while pointing to the risk of intermediaries that are engaged in digital asset markets as well as the “potential for systemic risk that could result from the build-up of leverage against digital assets.”
The hearing will be closely watched by industry participants.
The virtual hearing is scheduled to commence at 10AM ET and will be live-streamed on the Committee’s website.