(Bloomberg) – The U.S. Treasury’s top authority in financial oversight has said that government regulators need congressional action to adequately protect investors – and the financial system in general – from the dangers posed by so-called staplecoins.
“If Congress does not pass legislation, regulators will try to use the power they have,” but they will be without adequate oversight powers, said Nellie Liang, deputy secretary of the Treasury for Internal Finance, in an interview with Bloomberg News on Friday. What can agencies do without the power of Congress.
Investors in the cryptocurrency market often use stablecoins to enter and exit the trade, using them as a digital form of currency, which highlights the importance of its regulation.
Liang, who previously heads the Federal Reserve’s financial stability division, said of regulators: “They can do a little here and a little there, but if these are important for cryptocurrency assets, it can be a big deal if they are not stable. Danger. “
He was speaking shortly after the Federal Regulatory Commission released its annual report outlining threats to the US financial system. In that statement, the Financial Stability Oversight Board said it was preparing steps to regulate staplecoins if Congress did not pass laws.
But Liang admitted that “this is not a good plan B”.
“We need congressional action to address the prudent risks of staplecoins,” he said.
Stablecoins are a type of fast growing cryptocurrency whose value is tied to another asset such as the traditional currency or commodity. Most, like Tether – the largest, with about $ 76 billion in tokens traded – are linked to the dollar.
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