The US Presidential Financial Markets Working Group plans to make proposals in the next few months to determine the legal framework for stable coins, although the exact timing of these proposals has not yet been determined.
to the the report CoinDesk, the US Presidential Institution’s Financial Markets Working Group, which works directly with the US president as an adviser, announced Monday at a meeting that it intends to make proposals for the Queen’s Stable legislation in the coming months.
According to an official statement from the US Treasury Department, as expected, the meeting addressed issues such as the growth, applications and potential threats to stable coins. The discussion of the previous meeting of this working group, which was held on Friday, was limited only to the recent growth of stable coins and their role in the digital currency industry.
An official statement from the US Treasury Department said:
At this meeting, a presentation was made by the staff of the Ministry of Treasury for this working group, which was about the process of preparing a report on the Stables. The report is set to discuss the potential benefits and risks of current US stable coins and legal frameworks, and offer suggestions for resolving legal loopholes.
Jelena McWilliams, President of the Federal Reserve Insurance Company, Michael Hsu, Director of the US Currency Control Bureau, Nellie Liang, Deputy Treasury Secretary, Randal Quarles, Vice President of the Federal Reserve US with Federal Reserve Chairman Jerome Powell, US Treasury Secretary Janet Yellen, Gary Gensler, Chairman of the Securities and Exchange Commission and Rostin Behnam, Chairman of the Futures Trading Commission Goods were present at the meeting.
The meeting came days after Federal Reserve Attorney Jeffery Zhang and Yale University economist Gary Gorton published an article saying that stable coins could be used for the system. Pose a serious financial risk. It should be noted that this article was presented as a personal opinion of these two experts and had nothing to do with the Federal Reserve.
This article likens Stable Coins to a collection of wildcat banks that issued paper money during the American Free Banking period between 1836 and 1865. The article also cited the lack of insurance to guarantee repayment of funds, the risk of banking crises and the reduction of stable coin reserves when users’ demand for withdrawals increased as the main challenges of stable digital currencies.
It is unclear exactly when the Treasury Department intends to submit its proposals. It is also unclear whether the working group wants to maneuver more on congressional action or focus on organizational legislation.
The US Treasury Department said in a statement:
The Treasury Secretary stressed the need for urgent action to ensure a proper legal framework in the United States.