The financial working group of the American government pointed out that Stablecoins must meet certain regulatory standards in order to be accepted in the country. This comes after the controversial law on stable currency proposed by the American legislator Talib Rashid.
More clarity on stable coins
The working group released an extensive report Wednesday highlighting its views on stable coins. According to the report, stablecoin must meet appropriate money laundering and surveillance requirements.
The working group also believes that in situations where stable money is accepted for retail payments, companies must include additional financial safeguards. He further encouraged financial stakeholders involved in the development of stable coins to embark on appropriate financial principles that will align currencies with existing regulations.
These principles include risk management, stable currency arrangements and functions, among others. The working group also proposed that regulators U, S coordinate with each other and with international partners to ensure that they are up to date with the latest developments in the stable coin space.
Acting currency controller Brian Brooks believes the group has achieved a productive balance in terms of stable coins.
“In its wisdom, the group has also remained agnostic in terms of technologies related to hosted wallets, helping the nation remain competitive, preserving the industry’s ability to innovate in responsible ways and adapting to the market and consumer needs and preferences,” Brooks said.
The Financial Task Force is an important body and has the task of overseeing and nurturing U.S. financial markets. The group includes Treasury Secretary Steven Mnuchin, Federal Reserve Chairman Jerome Powell, Securities and Exchange Commission Chairman Jay Clayton and Commodity Trade Commission Chairman Heath Tarbert.
Stablecoins remain a major concern for regulators
Stablecoin remains a major source of concern for regulators who have turned to proposing laws regulating a stable market. Due to their relative price stability and cross-border opportunities, stablecoins pose a higher risk to fiat currencies than Bitcoin and Ethereum, which are known for their high volatility.
Corporations like Facebook have faced difficulties in convincing regulators of the legality of their stable coins. this forced Facebook to rename its stablecoin from Libra to Diem. This was followed by a controversial act of stable money proposed by Congresswoman Rashida Tlaib in collaboration with other representatives. In 2021, it promises to bring more clarity to stablecoin.
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