The Balance, November 3, 2021, Stablecoins Need Legislative Action Now, Regulators Say
While stablecoins are considered more stable in value, the President’s Working Group on Financial Markets (PWG) said in its report that they can still be risky. For example, people can trade them speculatively, manipulate them, or use them for illicit transactions, which can introduce risk to the entire financial system, the report said.
To mitigate these risks, the group advocated introducing legislation such as allowing only FDIC-insured depository institutions such as banks to issue stablecoins, which could prevent a run on the assets.
Even though bank associations like the Independent Community Bankers of America and consumer groups like the National Community Reinvestment Coalition applauded the PWG’s recommendations, others were concerned too much legislation could stifle innovation in this burgeoning market.
