Treasury Secretary Janet Yellen speaks during the daily press briefing on May 7, 2021, in the Brady Briefing Room of the White House in Washington, DC.
Saul Loeb | AFP | Getty Images
U.S. Treasury Secretary Janet Yellen will meet with the President’s Working Group on Financial Markets next week to discuss the role stablecoins could play in the financial system.
The meeting will take place Monday and will include representatives from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, the Treasury announced Friday.
Stablecoins are digital currencies designed to be less volatile than other cryptocurrencies by pegging their market value to an outside asset like the U.S. dollar.
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,” Yellen said in a statement Friday. “In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”
Regulators have become increasingly concerned about transparency in the trading of stablecoins, the reserves backing them and how much market participants rely on them to enable trading in decentralized finance, also known as DeFi. They’re growing in popularity and interest. Earlier this year, Visa said it would begin supporting payments on its network in the dollar-backed stablecoin USD Coin.
As more companies with cryptocurrency businesses go public or prepare to do so, like Coinbase and Circle, the industry needs further regulatory clarity on stablecoins. On Thursday, Federal Reserve Chairman Jerome Powell acknowledged before the Senate Banking Committee that stablecoins would need “an appropriate framework.”