Why are Regulators worried about stablecoins?
Here is our pick of the 3 most important Stablecoin news stories during the week.
Equally, why is the Crypto industry one minute welcoming and then in the next wary of regulation. Simple. The industry needs to be regulated to some level for mass adoption, but what that regulation could look like scares the hell out of any Crypto enthusiast and worries in equal measure the would be regulators.
“The rush to oversee stablecoins — and the industry’s lobbying push to either avoid regulation or get on its profitable side — might be the most important conversation in Washington financial circles this year. How officials handle sticky questions about a relatively new phenomenon will set the precedent for a technology that is likely to last and grow, effectively writing the first draft of a rule book that will govern the future of money.”
And, here they come!
- “The Treasury Department and other financial regulators in the United States have been scrutinizing stablecoin operators under Secretary Janet Yellen.
- Tether and other stablecoins are deemed the most urgent risks by Treasury officials.
- US regulators are preparing to clamp down on the digital asset industry as officials will discuss launching a formal review into stablecoins.”
Gary Gensler, U.S. Securities and Exchange Commission Chair, is one of the world’s most powerful financial regulators and a key player in the push by the government to regulate the trillion-dollar plus cryptocurrency industry.
Gensler analogized the world of cryptocurrency to the Wild West and said stablecoins “are acting almost like poker chips at the casino right now.” “History tells us private forms of money don’t last long… These stablecoins are acting almost like poker chips at the casino right now. So, to add to the Wild West analogy, I mean we have a lot of casinos here in the Wild West, and poker chips are these stablecoins at the casino gaming tables. And so I think there’s just a lot of warning signs and flashing lights that might have a spill on aisle three and I’d rather get ahead of it.”
So there we have it, privately issued stablecoins are like the wild west and casino poker chips. Thank god we have an existing system that works perfectly because it is run by brilliant regulators. All said with a poker face, but in this case they don’t hold all the cards, the real game is about to begin.
Alan Scott is an expert in the FX market and has been working in the domain of stablecoins for many years.
We have a self imposed constraint of 3 news stories per week because we serve busy senior Fintech leaders who just want succinct and important information.
New readers can read 3 free articles. To become a member with full access to all that Daily Fintech offers, the cost is just US$143 a year (= $0.39 per day or $2.75 per week). For less than one cup of coffee you get a week full of caffeine for the mind.