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December 5, 2022
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US Treasury Targets Stablecoins in Latest Regulatory Risk Assessment

US Treasury officials are targeting stablecoins in what they see as the most urgent risks.

US Treasury Targets Stablecoins in Latest Regulatory Risk Assessment, citing “people familiar with the subject”, to Bloomberg informed that authorities are drafting a policy framework to be rolled out in the coming weeks.

Their main concern is to ensure that investors can reliably move money in and out of tokens.

Anonymous insiders are concerned that a “uncertain sales of cryptoactives can threaten financial stability and that certain stable currencies can rise dangerously fast.”

Strengthening regulatory efforts

The Financial Stability Oversight Board is also preparing a formal review to see whether stable currencies pose an economic threat.

Officials are focusing on how stable currency transactions are processed and settled and whether market conditions have an impact, he added. Tomicah Tillemann, global head of policy at a cryptocurrency fund run by venture capital giant Andreessen Horowitz, commented:

“It is significant and very important that we are witnessing the first steps towards creating a regulatory framework around digital assets. That’s a big deal. ”

The report, when released, will go to the president’s working group on financial markets. The body includes heads of major agencies such as Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and Securities Commissioner Gary Gensler Chairman.

In late July, Yellen urged the regulation of stablecoins urgently after saying they are not properly supervised. Gary Gensler echoed the sentiment in early August, saying regulators must act to protect investors from fraud.

Also, in late July, acting currency controller Michael Hsu said regulators are examining Tether’s commercial papers to see if each USDT token was actually secured by the equivalent of one US dollar.

Tether has repeatedly issued assurances that its reserves are fully guaranteed, but has not yet produced a full independent audit.

Update of the Stablecoin ecosystem

Tether remains the market leader with a current supply of 69.4 billion, according to the Tether Transparency report. This is close to an all-time high for the USDT, which hit 70 billion earlier this week.

Of that total, 36 billion or 51.8% is based on the Tron network, with 33.8 billion or 48.7% running on Ethereum. USDT supply has grown 232% since the beginning of the year.

Circle’s rival, USDC, Stablecoin currently has $29.3 billion outstanding, after gaining 651% in terms of supply growth so far in 2021.

Source: CryptoPotato

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