Treasury Secretary Janet Yellen to discuss Stablecoins with regulators next week

U.S. Treasury Secretary Janet Yellen will meet with the President’s Financial Markets Task Force next week to discuss the role stablecoins could play in the financial system.

The meeting will take place on Monday and will include representatives from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, the Treasury said on Friday.

Stablecoins are digital currencies designed to be less volatile than other cryptocurrencies by pegging their market value to an external asset like the US dollar.

“Bringing regulators together will allow us to assess the potential benefits of stablecoins while mitigating the risks they may pose to users, markets or the financial system,” Secretary Yellen said in a statement on Friday. “With the rapid growth of digital assets, it is important that agencies work together to regulate this industry and develop possible recommendations for new authorities. “

Regulators are increasingly concerned about transparency in the trading of stablecoins, the caveats that underpin them, and how much market players rely on them to enable trading in decentralized finance, also known as DeFi. They are gaining popularity and interest. Earlier this year, Visa announced that it would start supporting payments on its network in the dollar-backed USD Coin stablecoin.

As more companies with cryptocurrency business go public or prepare to do so, like Coinbase and Circle, the industry needs more regulatory clarity on stablecoins. Federal Reserve Chairman Jerome Powell on Thursday admitted to the Senate Banking Committee that stablecoins need “an appropriate framework.”