Stablecoins and Regulation, current state of play.
Here is our pick of the 3 most important Stablecoin news stories during the week.
The Office of the Comptroller of the Currency (OCC) and the Securities and Exchange Commission (SEC) published stablecoin guidance Monday, on how cryptocurrencies backed by fiat currencies should be treated under law. Prior to Monday’s notices, there was no federal clarity around stablecoins.
Stablecoin issuers have been using U.S. banks for years, but in an unclear regulatory environment. Now, the OCC wants federally regulated banks to feel comfortable providing services to stablecoin issuers, it said in a press release. An accompanying interpretative letter, signed by Senior Deputy Comptroller Jonathan Gould, explained that while banks should conduct due diligence and ensure they assess the risks of banking any stablecoin issuers, stablecoins are becoming increasingly popular.
“National banks and federal savings associations currently engage in stablecoin related activities involving billions of dollars each day. This opinion provides greater regulatory certainty for banks within the federal banking system to provide those client services in a safe and sound manner,” Acting Comptroller of the Currency Brian Brooks said in a statement.
In the meantime, we also saw progress in one of the many trails of CBDC. Ethereum workshop ConsenSys said it has been chosen by the Hong Kong Monetary Authority (HKMA) to assist in Hong Kong and Thailand’s cross-border central bank digital currency (CBDC) pilot.
Germany, France, Italy, Spain and the Netherlands called on the European Commission to draw up strict regulation for asset-backed cryptocurrencies such as stablecoins to protect consumers and preserve state sovereignty in monetary policy.
So this week we saw Regulators provide clarity in the US on stablecoins, in HK they are in an active cross border trail trying to understand what a stablecoin is and in the EU they are worried about the threat it poses to state sovereignty and its citizens.
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.
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