The President’s Working Group on Financial Markets - comprised of the U.S. Treasury Secretary and the Chairs of Board of Governors of the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission - was joined by the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency in releasing a highly anticipated report on stablecoins.
In the report, this group of U.S. federal regulators identifies key gaps in U.S. authority with respect to stablecoins and made several recommendations for legislative provisions intended to subject stablecoins to a federal prudential framework on a consistent and comprehensive basis. In an accompanying press release, Treasury Secretary Yellen acknowledged that "[c]urrent regulation is inconsistent and fragmented" but stressed that the regulators will continue to do their best with what they've got while awaiting desired legislative fixes.
To address risks to stablecoin users and guard against stablecoin runs, legislation should require stablecoin issuers to be insured depository institutions. . . To address concerns about payment system risk . . . legislation should require custodial wallet providers to be subject to appropriate federal oversight. . . . To address additional concerns about systemic risk and economic concentration of power, legislation should require stablecoin issuers to comply with activities restrictions that limit affiliation with commercial entities. . . . In addition, Congress may wish to consider other standards for custodial wallet providers, such as limits on affiliation with commercial entities or on use of users’ transaction data.
