Officials in the U.S. are poised to introduce recommendations for buttoning up regulatory holes that surround stablecoins, according to a statement from the Treasury Department, per Reuters. Yellen’s meeting with the President’s Working Group (PWG) on financial markets assembles regulatory watchdogs in the financial sector to discuss pressing issues. The meeting focused on the importance of eCurrency rules for stablecoins, which are fixed in valuation to traditional money such as the U.S. dollar.
At congressional hearings last week, Federal Reserve Chair Jerome Powell pointed to the fast growth of stablecoins and the lack of rules and guidelines, Reuters reported.
Stablecoins are expected to become mainstream for consumer and corporate payments, Circle CEO Jeremy Allaire told PYMNTS CEO Karen Webster in January. Stablecoins, for now, are focused around B2B and B2B cross-border payments, Allaire said, but their use is expected to expand as time goes on.
The Bank of England (BoE) said last month that stablecoins and any central bank digital currency (CBDC) should be regulated in the same way that banks handle other payments. The BoE said earlier that it was mulling whether to launch its own CBDC, which was nicknamed BritCoin by Finance Minister Rishi Sunak.
Any digital currency has hurdles to scale before being adopted as a mainstream currency. The BoE said it is in favor of moving to adopt regulations, stating that “stablecoins must promise, credibly and consistently, to be fully interchangeable with existing forms of money.”
Despite the lack of regulations around the globe, El Salvador moved to grant bitcoin the ability to serve in the country as legal tender, similar to the U.S. dollar, which is the region’s official currency.