WASHINGTON—A top U.S. Treasury official said financial regulators are prepared to extend existing authorities to rein in stablecoins, although Treasury hopes instead Congress will move on key legislation to regulate the space.
Nellie Liang, undersecretary for domestic finance at the Department of the Treasury and formerly the top financial stability official at the Federal Reserve, told Bloomberg that lawmakers must enact legislation to reduce risks around stablecoins—or digital assets pegged to fiat currency—including fraud, illicit finance and cybersecurity concerns. Congressional action, she said, would help protect the nation's wider financial system.
Without new legislation, "regulators will try to use what authority they have," though it lacks oversight power, Liang told Bloomberg. She added that authority would equate to "a little here and a little there," and warned that leveraging it could not even be described as a sufficient "plan B."
Blockchain expert David Gerard, author of the book "Attack of the 50 Foot Blockchain," told Information Security Media Group, "Stablecoin regulation can't come soon enough. These are wildcat banks, 1800s-style. … This regulation should have been in place years ago, but now is better than never…Stablecoins pull the sort of nonsense that money market funds pulled to cause the 2008 financial crisis—dollars backed by rubbish and complicated nonsense. … Stablecoin companies need to be regulated as either banks or accredited-investor-only money-market funds."
Nellie Liang, undersecretary for domestic finance at the Department of the Treasury and formerly the top financial stability official at the Federal Reserve, told Bloomberg that lawmakers must enact legislation to reduce risks around stablecoins—or digital assets pegged to fiat currency—including fraud, illicit finance and cybersecurity concerns. Congressional action, she said, would help protect the nation's wider financial system.
Without new legislation, "regulators will try to use what authority they have," though it lacks oversight power, Liang told Bloomberg. She added that authority would equate to "a little here and a little there," and warned that leveraging it could not even be described as a sufficient "plan B."
Blockchain expert David Gerard, author of the book "Attack of the 50 Foot Blockchain," told Information Security Media Group, "Stablecoin regulation can't come soon enough. These are wildcat banks, 1800s-style. … This regulation should have been in place years ago, but now is better than never…Stablecoins pull the sort of nonsense that money market funds pulled to cause the 2008 financial crisis—dollars backed by rubbish and complicated nonsense. … Stablecoin companies need to be regulated as either banks or accredited-investor-only money-market funds."
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