According to three different sources, the US Treasury Department has started looking into stablecoins, discussing with industry representatives about the possible risks and benefits.
Being fully aware of the rapidly growing type of crypto, and the fact that it stood at $125 billion as of Friday on the market, the US financial regulators are meeting with banks, credit unions and other financial institutions to understand what are stablecoins and whether they could be considered as a possible legal tender in the States.
US Financial Regulators Are Trying to Understand Stablecoins
As the cryptocurrency market exceeded $2 trillion in April this year, it alarmed Washington financial regulators to investigate the risk and benefits of the rapidly growing type of crypto, the stablecoins. The policymakers are trying to discover all of the possible opportunities and risks posed by this type of crypto to the traditional US financial system. In the coming months, sources say, they will issue reports on the subject.
It looks like the US Treasury Department officials met with banks, credit unions and other financial institutions to discuss whether establishing a regulatory framework for stablecoins would be a good idea. The officials are interested to know, if they become an instant hit, whether there would be risks of too many people investing in stablecoins at the same time. They also wanted to know the ways in which stablecoins could be used, structured and whether the current regulation was enough and whether other safety issues should be addressed.
The Federal Reserve, the Commodity Futures Trading Commission, the US Securities, and Exchange Commission, and the Office of the Comptroller of the Currency are also looking into cryptocurrencies.
What Are Stablecoins Really?
Stablecoins are nothing like Bitcoin, the world's first cryptocurrency, of an entirely decentralized nature and with a value that continues fluctuating. Stablecoins are actually combining the best of both the crypto and the fiat currency world, providing both digital advantage and speed when it comes to transactions and addressing volatility issues.
If we wanted to define it best, we would say that a stablecoin is a crypto whose value is pegged to traditional fiat currencies like the US dollar, the euro or the Japanese yen, for instance. To put it simply, one stablecoin equals one USD, so its value does not go through wild fluctuations like Bitcoin’s. What you’re getting from it is the digital-asset flexibility of a crypto and the asset stability of a fiat currency, hence, the perfect combo.
227.425 SRY