All stablecoin supplier companies must respond to the committee’s inquiries by December 3rd.
While US officials fight for transparency for stablecoins with big names like Circle and Tether, the Tether company has assured officials that it will abide by policymakers in their future endeavors.
A few days ago, Senator Sherrod Brown wrote letters to cryptocurrency giants to better assess the process of minting stable coins. To demand more clarity, the US Senate Banking Committee asked stablecoin issuers to reveal their processes and draw an intricate conclusion from studies on how specific levels of recovery influence digital currency.
The senator, who is also chairman of the Senate Committee on Urban, Housing and Banking Affairs, has sent letters to other stable currency issuers such as Coinbase, Gemni, Paxos, Trustoken, Binance Center.
In letters issued by the Senate, it was noted that stablecoins can potentially pose investor protection risks while increasing various market integrity issues. Consequently, the committee asked stablecoin issuers to provide detailed information involving basic purchases, minting processes, limitations, as well as issue and redemption data.
Senator Brown also addressed CEOJ Eremy Allaire, asking him to explain the vital operating features of stablecoin USDC.
All stablecoin supplier companies must respond to the committee’s questions by December 3rd.
The answer to the risk concerns of Tether and Stablecoins.
The official issuer of stablecoin USDT, Tether has responded to regulatory authorities saying the cryptocurrency will work together with the authorities. In the various tweets Tether posted, he acknowledged the acumen with which the Senate is trying to get information about the crypto environment. In another tweet, Tether is seen pushing for unison between government officials and technology pioneers.
Tether’s immediate response was much needed, as public disobedience by any crypto network could have created a sense of fear in the crypto community. In a recent report by Bloomberg, it was alleged that Tether was indebted in large sums. While the news may have created a sense of anxiety among USDT users, Tether vehemently denied the allegations and insisted that its funds are solidly backed by collateral.
Last month, the US Commodity Future Trading Commission (CFTC) imposed a $41 million fine on Tether for misleading claims that its stablecoin, USDT, was fully supported by associated fiat currencies.
While adoption of stablecoins in the United States is on the rise, Senator Brown has realized the need for a deeper understanding of how digital assets operate along with their potential risks and limitations. The senator, in his letters, did not forget to cite the stablecoin report assembled by the President’s Working Group (PWG).
The report was published by an influential group of US regulators, who insisted that lawmakers oversee stable-currency issuing firms.