The US institution has released a report on stabilization currency and pointed out the potential risks that consumers should pay attention to and put forward the corresponding recommendations. The staff of these institutions have consulted the main market participants, members of the trade association, experts and advocates. The report believes that legislation is the final way, but proposes a temporary solution.
The market value of stabilization currency has reached $ 133 billion. The relevant agency alliance rans on the brain and planning a road for a growing stablecoins.
The 26 pages of the Ministry of Finance and other regulators have emphasized the importance of stabilizing the currency in the ecosystem. The organization known as the President’s Financial Market Working Group pointed out in its report, “stabilizing currency is mainly used to promote other digital assets trading, financing and lending”.
The market value of the current stabilization currency is approximately $ 133 billion, of which the largest of Tether’s USDT is $ 70 billion. This number has increased by 500% in the past 12 months, and their adoption rate continues to soar with DEFI and digital asset transactions.
At the same time, the report recognizes that stabilization has inherent risks, including “the impact of SEC and CFTC jurisdiction.” The composition of stablecoins may include securities, goods, and derivatives, as the regulatory limits become blurred, can cause some troubles. Other risks identified include the value loss caused by stablecoins and payment system risks. Operational risks from “information system or internal process defects, human error, management failure, or external event interrupt”.
The report emphasizes three policy issues that may arise when stabilizing the scale of the currency scale.
- Entity closed closes the economical risk issues of the economy,
- “Excessive economic power is over-concentrated” problem.
- Expand the possible anti-competitive effects of operations.
Several recommendations have been made in the report, trying to reduce the risk of using stablecoins. These recommendations include comprehensive legislation, temporary measures, and strengthen cooperation between international financial organizations.
In order to solve these gaps, the stablecoins field requires a consistent and comprehensive regulatory framework to increase the transparency of stable currency. And ensure that stabilization can play a role in the condition of normal periods and market stress.
At the same time, it is urged to take immediate action to “ensure that the stablecoins are subject to appropriate federal supervision on the basis of consistent and comprehensive.” In the case where the Congress does not take action, temporary measures will enable all institutions to strengthen coordination and cooperation on their common interests.
Despite the lack of supervision, the agency played a role in reducing the risk associated with stability coins. Last month, the US Commodity Futures Trading Committee command Tether pays a fine of misleading statements about USDT basics. Similarly, USDC issuer Circle revealed in October that it is under investigation by the US Securities and Exchange Commission.