Opinion Crypto paranoia: US regulators catch stablecoin jitters
US financial regulators are so concerned about the perceived threat to financial stability and investors of stablecoins that they are warning they will act unilaterally if Congress doesn’t legislate.
That could trigger a liquidity issue similar to a run on bank deposits, which could harm users and the broader financial system For the moment, even within the crypto asset sector, stablecoins are a relatively small segment. The overall crypto market is valued at about $US2.3 trillion, while stablecoins are valued at only about $US130 billion.The opacity of the crypto markets means financial regulators don’t have a clear idea of what that might mean for the regulated parts of the system and therefore for financial stability.
The one certainty is that they will be regulated, whether as depository institutions like banks or as securities, with regulated disclosure requirements, regulatory oversight and inclusion in tax systems. There’s also an underlying concern that digital assets might undermine the ability of central banks to execute effective monetary policies.
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