Popular stablecoins, or digital assets designed to have a “relatively stable price,” are getting noticed by policymakers. While these crypto units are more stable than their counterparts, a recent Financial Services Oversight Council (FSOC) report suggests they can pose risks to the financial markets.
Specifically, the FSOC 2024 Annual Report argues that issuers lack trustworthy information about their holdings and policies on reserve management practices.
The Council contends that transparency may compromise the holders and prevent analysts from making accurate market analyses. As such, the Council is urging the US Congress to discuss and pass new legislation that can regulate stablecoins and their issuers.
FSOC Calls For New Regulatory Framework On Stablecoins
This isn’t the first time there’s a call for regulation, and a comprehensive federal framework for these digital assets is not new. Outgoing Treasury Secretary Janet Yellen has also called for reviewing and passing new legislation in February 2024. Yellen’s recommendations last February were based on an FSOC report and recommendations made two years earlier.
The latest FSOC report about the potential impacts of stablecoins on the financial system was released on Friday, December 6th. According to the council, these stablecoins threaten the country’s economic stability and are at risk of running due to the absence of risk management standards.
The council also raises the question of transparency, which is lacking among stablecoins and their issuers. The FSOC says the lack of transparency in holdings and reserves policies will affect holders and prevent them from making an informed market analysis.
Tether Remains In The Crypto Spotlight
Tether remains the top stablecoin, with a $138 billion ma
Go to Source to See Full Article
Author: Christian Encila
