Senior U.S. financial regulator expresses alarm about stablecoins
A top U.S. banking regulator expressed worry that stablecoins might be seen as a word of “disguise” and that the technology resembles banking but is not governed by the same regulations as the conventional banking industry.
Hsu’s comments matched those of the Financial Stability Board, an international group comprised of central bankers and top regulators, which published a study on Tuesday morning expressing worry that present stablecoins do not fulfil the organization’s “high-level guidelines” and recommending that authorities be prepared to apply appropriate rules to any stablecoins that may become Global Stablecoin Arrangements (GSCs).
The study was issued before to the October 13 meeting of the G20 Finance Ministers and Central Bank Governors (FMCBG).
Stablecoins were brought up by Hsu when he mentioned his emphasis on “safety, soundness, and justice” as an area of concern. However, Hsu said that he did not want to fully prohibit financial technology experimentation.
As Acting Comptroller of the Currency, Hsu said, “If the topic being considered or experimented with is not very significant, I will probably not worry that much about it.” “There is a materiality level, which I believe offers plenty room for the experimentation that people want to do,” and his organization would only act if a project began to breach the safety, soundness, and fairness parameters he highlighted as his primary concern.
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