According to the Wall Street Journal, the Biden administration is considering regulating stablecoin issuers as if they were banks. The government is also considering asking Congress to pass legislation to create a special-purpose charter designed expressly for these businesses.
All of the Biden administration’s proposals will be included in a Treasury-led report released in October.
Treating issuers as if they were banks
Apart from treating stablecoin issuers like banks, the administration will also encourage them to register as banks, with the crypto space’s constant and rapid expansion causing authorities great anxiety.
In addition to the regulatory policy, the administration considers going to Congress and requesting that it propose legislation to create a special-purpose charter for these companies. If Congress passes the special-purpose charter, stablecoin issuers will be subject to federal oversight rather than state legislation.
Work Is Still Being Done
Although the ideas and plans are still in the works, they will be included in a Treasury-led paper due out in late October. Treasury Secretary Janet Yellen, Federal Reserve Chairman Jerome Powell, and Securities and Exchange Commission Chairman Gary Gensler are the article’s authors. Stablecoins have recently been compared to poker chips by Gensler.
Getting the Regulators’ Attention
Stablecoins are digital tokens frequently linked to external assets or currencies, such as the US dollar. Stablecoins make only a small percentage of the $2 trillion in digital assets, but their rapid growth has piqued regulators’ interest.