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The lobby group says regulators should not treat stablecoins as investment products
A US-based cryptocurrency lobby group has called on US regulators not to subject asset-backed stablecoins to new rules, Reuters reported on Monday.
The Chamber of Digital Commerce is a group that includes Goldman Sachs and Citigroup Inc, as well as other companies and providers. They don’t want stablecoins to have to face tougher rules, such the ones likely to be proposed by President’s Working Group for Financial Markets.
The chamber sent a letter asking the President’s regulatory group (which includes the US Treasury, the Federal Reserve) to remind them that stablecoins backed by the dollar are not a threat to the country’s financial system and that they should be subject to new rules. This would have been a bad regulatory approach for the sector’s burgeoning sector.
According to the lobby group stablecoins such as USD Coin (USDC), should not be treated by regulators as investment products. Instead of creating separate regulations for this sector, the government should align its oversight with other digital payment tools.
While the US regulatory group is working towards implementing some of the recommendations made Treasury Secretary Janet Yellen’s, the Chamber of Digital Commerce claims that the sector presents no systemic risk.
The chamber has also urged regulators to work closely with “well-regulated” US-based stablecoin issuers, with a view to promoting the technology. They also advocate for these companies to get access to the Federal Reserve payments infrastructure, according to the letter cited by Reuters.
With the stabilitycoin market growing in recent years due to global financial stress, many governments have developed proposals to prevent further growth. These steps are centered on the need to protect consumers from potential financial harm, mostly due to speculative trading.
Earlier in the month, G 20 urged governments to improve oversight of stablecoins. A new ‘global stabilizecoin’ must undergo all regulatory and legal checks before it can be approved.
