Jelena McWilliams, head of the Federal Deposit Insurance Corporation (FDIC), said the agency is working with other regulators in the United States to investigate “under what circumstances banks may engage in activities involving crypto-assets.”
Speaking at the Money20/20 Fintech Conference on Monday, McWilliams said that in coordination with the Federal Reserve and the Office of Currency Control, the FDIC is seeking to provide regulatory clarity for banks to process crypto assets, including stablecoins. The chairman said the FDIC plans to issue “a series of policy statements” on guidance for banks in the coming months.
According to McWilliams, stablecoins have many potential benefits, such as faster, cheaper and more efficient payments to consumers. However, he argued that if “one or more of them become a dominant mode of payment in the United States or globally,” it could have significant impacts on that country’s financial stability as funds are no longer held in insured banks.
“To realize the potential benefits stablecoins have to offer, while taking into account potential risks, stablecoins must be subject to well-designed government oversight,” said the FDIC chairman. “This oversight should be based on the basis that stablecoins mined outside the banking industry are backed by truly secure, highly liquid assets at a 1:1 ratio.”
McWilliams’ remarks came the same day as Bloomberg reported that many US regulators had agreed on the Securities and Exchange Commission, which is spearheading the country’s efforts to regulate stablecoins. The Treasury Department stated in July that it is exploring the creation of some form of banking charter for stablecoin issuers.
The apparent lack of regulatory clarity regarding their digital assets has been an issue for many firms in the US, who fear legal action or other forms of government response. Some lawmakers have introduced legislation for US regulators to work with participants in the crypto space to better define what is expected of them.
Source: Bloomberg
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility.
