U.S. Treasury Secretary Janet Yellen will hold a meeting Monday to discuss the regulation of stable coins with the Federal Reserve Chair Jerome Powell, along with the leadership of the CFTC, SEC, OCC and the FDIC.
The meeting will discuss what roles could stable coins have in the future of the financial market and what risks do stable coins pose to future investors.
Yellen was quoted saying “Bringing together regulators will enable us to assess the potential benefits of stable coins while mitigating risks they could pose to users, markets, or the financial system,”
Many are skeptical of the meeting considering the Federal Reserve Chair Jerome Powell recently stated in front of the Senate Banking Committee that he believes cryptocurrencies have “failed” payment methods.
This is not going to go well for current stable coins #USDT #USDC #BUSD #DAI US Treasury Secretary Yellen Outlines Plans to Regulate Stablecoins in Collaboration With the Fed, SEC, CFTC https://t.co/10US46R5kp via @BTCTN
— Ron Dior (@rondior) July 17, 2021
Federal Reserve Chair Jerome Powell said there are potential risks from stable coins and that they require regulation to ensure their safety https://t.co/V6KH6FB7U8 (via @SteveMatthews12)
— Bloomberg Economics (@economics) July 14, 2021
CNBC covered the story and shared these details:
U.S. Treasury Secretary Janet Yellen will meet with the President’s Working Group on Financial Markets next week to discuss the role stablecoins could play in the financial system.
The meeting will take place Monday and will include representatives from the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, the Treasury announced Friday.
Stablecoins are digital currencies designed to be less volatile than other cryptocurrencies by pegging their market value to an outside asset like the U.S. dollar.
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,” Yellen said in a statement Friday.
Regulators have become increasingly concerned about transparency in the trading of stablecoins, the reserves backing them and how much market participants rely on them to enable trading in decentralized finance, also known as DeFi.
what if liquidity from stable coins starts to move to $BTC over this weekend before the monday meet.
obviously cant move $USDT to banks immediately.
to stay safe $BTC could be safe haven for tethers now.
👀🚀 👀🚀 accumulation time #HODLhttps://t.co/JOts0VRYd0
— Seshbon (@seshbon) July 17, 2021
The U.S. Department of Treasury released this statement regarding the regulation of stable coins:
Today, Secretary of the Treasury Janet L. Yellen announced plans to convene the President’s Working Group on Financial Markets (PWG), in addition to the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, to discuss interagency work on stablecoins. The group will meet Monday, July 19.
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system,” Secretary Yellen said. “In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”
This interagency work builds on the PWG’s December 2020 PWG “Statement on Key Regulatory and Supervisory Issues Relevant to Certain Stablecoins.” The PWG will examine the current regulation of stablecoins, identify risks, and develop recommendations for addressing those risks. The PWG expects to issue written recommendations in the coming months.
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