Laws on StableCoins are urgently needed”, say the top US regulators

A group of US regulatory authorities said that legislation for dollar-supported stable coins, which are central to the cryptocurrency market worth $ 2 trillion, were "urgently needed" and argued that the operators of the digital tokens should essentially be treated like banks.

In a report, the President of the President for Financial Markets, consisting of the finance minister and the leaders of all important US finance supervisory authorities, said that StableCoin emitters should become "insured", comparable to banks, the savings accounts for customers.

The proposal reflects the Stable Act, a law proposal that was presented to the US Congress last December and which would require StableCoin operators to receive complete banking licenses.

Such a step would bring a drastic tightening of the supervision of issuers of stable coins who have previously worked on the edge of the financial system and would submit the 130 billion dollar industry to a strict regulation, in return for access to emergency liquidity from the supervisory authorities in stress times. The contributions of customers at insured financial institutions are also prevented from the US government to a specific dollar amount.

"The rapid growth of stable coins increases the urgency of this work," the report says. "The growth of payment tablecoins risks non-appropriate protection for users, the financial system and the economy in general."

other suggestions include an increased state supervision of wallet providers-groups that offer products that enable users to keep their crypto tokens-and the obligation of stable coin emitters to restrict their belonging to commercial companies.

A high -ranking administrative officer said that the group was ready to take direct measures if the congress should not act urgently. This could include the application for a naming of the Financial Stability Council for certain stablecoin activities that would enable the competent authority to determine this risk-taking standards in this regard.

Currently, stable coins are mainly used for the purchase and sale of volatile cryptocurrencies such as Bitcoin, although some operators are interested in increasing acceptance as a tool for quick, cheap global transfers.

The President's working group has already described stable coins as a potential threat to financial stability and even for national security. Various supervisory authorities around the world have expressed their concerns about their potential illegal use, their weak supervision and cases of lack of transparency in tokens that are to be covered one -to -one with hard currency activa, mainly dollar.

A high-ranking administrative officer said the group rejected suggestions that stable coins should be treated differently than banks based on the use of distributed Ledger technology. Cryptocurrency exchange Coinbase, which jointly operates the StableCoin USD worth 33 billion USD with the payment company Circle, proposed a new regulatory authority for cryptocurrencies last month.

Some crypto groups are interested in acting within the limits of traditional financial regulation, but others are cleverly to avoid these rules by setting companies abroad.

supervisory authorities around the world have increasingly tried to control stable coins because the number of coins in circulation has shot up. In Great Britain, the Bank of England warned in June that stablecoins have to ask themselves "difficult questions".

Other bodies pursue alternative approaches to stable coins, which means that the Financial Stability Board expresses concerns about the regulatory arbitrage. A report of international regulatory authorities from the beginning of October suggested to regulate stable coins in harmony with payment systems and clearing houses.