Recently, U.S. Treasury Secretary Janet Yellen advised financial regulators that they must act quickly in creating a framework to regulate the fast-rising stablecoins.
Yellen was at the meeting of the President’s Working Group on Financial Markets, which discussed the rise of stablecoins and how these new currencies could be better regulated.
The discussion also revolved around the possible risks of stablecoins and how they could possibly impact the security and stability of the U.S economy.
Last February, Yellen had warned that the misuse of cryptocurrencies is rising and the U.S. government must do something about it.
Yellen is not an “anti-crypto” government official, in fact, she acknowledges the big potential of cryptocurrencies for the U.S. economy. But she is also concerned that cryptocurrencies could also be used to fund terrorism and online drug trafficking.
Jeremy Allaire, chief executive of Circle, a peer-to-peer payments technology company, is also in the meeting and said that the discussion has produced a clearer vision for stablecoins.
He acknowledged that stablecoins shouldn’t be completely wiped out but be regulated and authorized to be part of the economy.
Federal Reserve Chair Jerome Powell, who is also at the meeting, said that there is a high need to create and implement a strong regulatory framework for stablecoins.
He also acknowledged that stablecoins would continue to rise even further in the future, that’s why the government should have a viable solution to regulate them.
Even with the stablecoins’ steady growth throughout the years, the U.S. government hasn’t created any regulatory framework that can prevent these currencies from being used to fund illegal and highly dangerous activities.
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