November 2, 2021

No Compromise, US Federal Agency Wants Stablecoin Under Law!

 The United States (US) federal agency is taking a wide step in tightening legislation on the crypto asset, stablecoin on the grounds of its risk to the national economy.

In a report filed by the President’s Working Group on Financial Markets on Monday there was emphasis on implementing legislation on stablecoin would push the asset into an efficient, appropriate, and inclusive payment option.

In fact, it is not impossible that the use of stablecoin as a payment medium is becoming more widespread due to the impact of the network or the relationship between stablecoin and existing user platforms.

As a result, economic advisers urged Congress to highlight formal regulatory oversight and market structure as soon as possible to protect and inform investors, issuers, and crypto exchanges.

This also includes strict monitoring of any activity involving stablecoin.

They also proposed for Congress to pass legislation limiting the production of stablecoin for insured banks. That way, supervisors are able to monitor a larger industry space.

Stablecoin is called ‘stable’ because this asset is backed by other assets, such as the US dollar.

Clearly stablecoin producers, the relationship of these two types of assets is achieved through the production of tokens of equal amount with state treasury assets. They also guarantee investors can convert their tokens to cash at any time.

This is of concern to lawmakers as the link between the two is likely to exacerbate the country’s economic crisis.