Janet Yellen’s Twitter account provided this image.
The US Treasury Secretary, Janet Yellen, is meeting with a working group made up of the SEC, the Federal Reserve, and the CFTC today to explore stablecoins.
The Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation have also been invited to the conference by Yellen.
Secretary of the Treasury Janet Yellen is scheduled to meet with top US regulators today to discuss stablecoins and their potential role in the country’s financial system. In a statement, the agency stated that it will also encourage other financial industry regulators to analyze the benefits of stablecoins and mitigate the dangers they pose.
Yellen announced on July 16 that the President’s Working Group on Financial Markets (PWG) would meet today. The heads of the Securities and Exchange Commission, the Federal Reserve, and the Commodity Futures Trading Commission make up this group. Yellen also invited the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.
She added, “By bringing together authorities, we will be able to analyze the potential benefits of stablecoins while minimizing the risks that they may pose to users, markets, or the financial system.” Given the rapid rise of digital assets, it is critical that the agencies work together to regulate the sector and establish any proposals for new authority.
The meeting takes place at a time when the stablecoin sector is growing more important to the cryptocurrency industry. The supply of stablecoins has already topped $110 billion. Despite being dogged by controversy over its backing and alleged market manipulation, Tether (USDT) controls about 60% of this market. The USDC from Circle Financial is the second-largest, accounting for little under 25%, with the Binance USD (BUSD) contributing for roughly 10%.
Stablecoins are the stars of the show.
The growth of stablecoins was remarkable in the second quarter, facilitating $1.7 trillion in transactions. This was a 1,090 percent increase year over year and a nearly 60% increase from Q1. According to Messari, a data analysis and research platform, they are on track to process $5.5 trillion by the end of the year.
While centralized stablecoins like Tether and Circle have dominated the market, decentralized stablecoins are gaining traction. According to Ryan Watkins, a Messari researcher, decentralized stablecoins have reached an all-time high market share of 10%.
DAI continues to reign supreme in this market. Despite a drop in market share this year, owing in part to the rise of Terra’s UST, it still holds a commanding 61 percent dominance.
One of the industry’s heavyweights told the Wall Street Journal that the stablecoin business welcomes additional government monitoring. If the business is to prosper, Jeremy Allaire, the CEO of Circle FInancial, believes that clear rules are required. He remarked of today’s meeting, “I think it’s excellent news.”
This isn’t the first time the President’s Working Group has convened to discuss stablecoin-related concerns. The PWG issued a statement on stablecoins in December, recommending that they be backed in a 1:1 ratio, among other things. Issuers should also invest in high-quality assets denominated in US dollars and keep them in regulated US institutions.
Stablecoins Janet Yellen/n
