• Flexi Group

Biden is requesting legislation from Congress to regulate stablecoins.

On Monday, the Biden administration issued a long-awaited study requesting that Congress implement laws for stablecoins.

According to the paper, stablecoins, which are cryptocurrencies linked to government-issued money such as the US dollar, might become widely embraced, with a legal framework increasing trust in utilizing the digital assets for payment purposes.

According to the President's Working Group on Financial Markets study, "if well-designed and carefully regulated, stablecoins might offer speedier, more efficient, and more inclusive payment choices."

Stablecoin regulations are "urgently needed," according to the report, and Congress should enact specific legislation, such as permitting only banks to produce the currencies.

The paper cautioned that "failure to act risks the expansion of payment stablecoins without proper security for users, the financial system, and the broader economy."

In the absence of stablecoin legislation in Congress, the Financial Stability Oversight Council should consider labeling some activities as systemically significant. The Federal Reserve may eventually create stablecoin guidelines as a result of this.

Biden has long collaborated with key economic advisors and senior regulators, including Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell, on stablecoin regulations. The Fed is also anticipated to release a separate research on digital currencies soon.

As the public's interest in digital assets has surged in recent months, regulators have been wrestling with how to control them. Stablecoins, although accounting for a small portion of the more than $2 trillion digital-asset market, have piqued regulators' interest due to their rapid rise.

Tether, Circle, and Binance all have well-known currencies, with a total market cap of $110 billion, up from $11 billion last year.

By Flexi Team

*DISCLAIMER: This article and its publication are intended to provide a brief introduction and act as a general guide. This is provided for information purposes only and cannot be utilized as a substitute for professional advice. This document does not represent a legal opinion and one must not rely on it without receiving independent advice based on the particular facts of its own case. No responsibility is accepted by the author or the publishers for any loss suffered from acting or refraining from acting based on the contents of this publication.

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