Key Takeaways
- US regulators collaborate to formulate guidelines for banking institutions participating in cryptocurrency transactions.
- Stablecoins are more efficient as a means of payment.
- Stablecoin dominance may spell doom for the country’s economic stability if not regulated.
With cryptocurrency activities being the talk of the day in most economic conferences, financial institutions are gearing up to perform more activities centred on digital currencies under proper oversight. Jelena McWilliams, the presiding person at Federal Deposit Insurance Corporation, affirmed this while delivering her speech during the Money2020 Fintech Conference.
According to her, the FDIC, in partnership with relevant regulatory bodies like the federal reserve and the office of the comptroller of the currency, is set out to put in place certain regulatory guidelines to govern the activities of banking institutions involved in transacting cryptocurrencies. She also went further to reiterate FDIC’s plans to release batches of policy statements to serve as guidelines for banks in the months to come.
While delivering her speech, McWilliams stated that “the inherent benefits of stablecoins to consumers can not be overemphasized, as consumers currently enjoyed pocket friendly, yet efficient means of making payments. But that is not enough reason to throw caution to the winds. As the dominance of one stable coin as a means of payment within the country or around the world would greatly impact the country’s financial status. And that would spell doom for insured banking institutions.”
Jalena also went further to state that the only way to maximize the amazing benefits stablecoins afford consumers is to ensure that it comes under the regulatory purview of the government. And that all stablecoins issued out the banking sector are sufficiently supported by assets with high liquidity.
Jalena’s statement came just after Bloomberg’s insight of the resolution by a good number of the US regulators, who agreed that the nation’s move towards the regulation of stablecoins is to be overseen by the SEC. The formation of a banking license was initiated by the Department of the Treasury, which affirmed this in a statement and further noted stablecoin issuers as the primary reason for the banking charter.
Related post: United States State Bank Regulators Accept to Single Set of rules for Financial Technology.
Several firms have shared their trepidation of legal actions and other possible consequences from the government due to the vagueness in policies regarding virtual assets in the US. To reassure cryptocurrency players in the banking sector, some legislators have enacted legal frameworks for US regulators and these players to work together.
Do you agree with McWilliams that unregulated cryptocurrency usage will pose a sufficient threat to the country’s economy? Let us hear your thoughts on the comment section.
