Stablecoins have been a major topic in and out of the crypto industry recently — not only due to all the CBDCs that are being developed in the world, but also because of coins such as Facebook’s Libra. Now, a group of major US regulators set up some new rules regarding the coins.
PWG discussed stablecoins and their classification
According to the recent statement on Financial Markets issued by the President’s Working Group (PWG), there are some new expectations regarding stablecoins. The PWG did not say anything particularly new or revolutionary. However, the statement did establish certain levels of clarity, showing the direction in which stablecoin development might continue from this point forward.
The PWG — including representatives from the Federal Reserve, the Treasury, the US SEC, and the CFTC — said that stablecoin issuers need to abide by the rules regarding the financial law. Essentially, they need their systems to be compliant with the AML requirements before entering the market.
However, they never strictly stated that stablecoins are currencies, or commodities, which would subject them to somewhat less aggressive regulation than derivatives or securities.
Instead, they simply said that stablecoins may be any of them, depending on their design and other factors. Their classification would decide on which set of rules and regulations they need to be in compliance with.
Stablecoin issuers have a single new rule to follow
In essence, nothing was really changed, and regulators are once again simply inviting responsible innovation. However, one thing that is interesting to note is the expectation for stablecoin issuers to have certain systems set up before launching their coins.
Brian Brooks, the active Comptroller of the Currency, also noted that the group did recognize the importance and value of stablecoins and their role in the national and global economies alike. They understood the need to ensure that these financial tools will not be used for criminal activity or become a matter of national security.
While the statement was fairly mild, the fact that it did not make a statement similar to the recent bill by Representative Rashida Tlaib is encouraging. Tlaib’s bill proposed targeting node operators as money service providers, which caused quite a bit of outrage in the crypto industry.
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