The recently issued report on stablecoins, including recommendations that Congress address potential risks and that regulators take interim actions, was discussed Monday by federal financial institution regulators meeting as a group.
Meeting virtually as the Financial Stability Oversight Council (FSOC), the group of regulators discussed the report issued Nov. 1 by the President’s Working Group on Financial Markets. That report recommended that payment stablecoins and their arrangements should be subject to a federal framework on a consistent and comprehensive basis through an act of Congress – including by requiring that stablecoins may only be issued by federally insured depository institutions, essentially, federally insured credit unions and banks.
The report also said that such federal legislation would complement existing authorities held by federal regulators meant to ensure market integrity, investor protection, and prevention of illicit finance.
The FSOC released a “readout” of its Monday meeting; minutes from the meeting, which was chaired by Treasury Under Secretary for Domestic Finance Nellie Liang (acting pursuant to delegated authority in lieu of council chairman Treasury Secretary Janet Yellen). The readout stated that council members discussed the report recommendations, “which called for Congressional action to address potential risks as well as interim measures that could be taken by regulatory agencies.”
The FSOC also, the readout stated, heard a presentation from Treasury staff on the recently issued progress report by staff of agencies participating in the Inter-Agency Working Group on Treasury Market Surveillance; and received an update from Treasury staff on the development of the Council’s 2021 annual report.