- A top U.S. Treasury official said the Biden administration and members of Congress are making progress toward crafting guardrails for fast-growing stablecoins, which U.S. officials have warned could pose systemic dangers, reported Bloomberg.
- There's "broad agreement" that risks posed by stablecoins need to be addressed -- especially given the market's growth, the report quoted Nellie Liang, the department's undersecretary for domestic finance.
- Stablecoins are a fast-growing cryptocurrency whose value is pegged to another asset, like a traditional currency or commodity. The outstanding value of all stablecoins has grown to more than $175 billion from about $5 billion in 2020, the report cited Liang.
- In November, the Treasury and a group of federal agencies appealed to Congress to act to address "key gaps" in regulatory authority over stablecoins.
- Related: Biden Administration Calls For Stablecoin Regulation: Report
- The report quoted Liang commenting that the Federal Reserve's plans for a real-time payments system might provide some of the benefits that advocates hope to see from a central bank digital currency and built-in protections for the financial system.
- The coming system, known as FedNow, aims to make inexpensive, near-instant interbank payments available 24 hours a day, 365 days a year, before the end of 2023. That could make bank accounts more useful and attractive to the estimated 5% of U.S. households that currently don't have accounts.
- President Joe Biden signed an executive order earlier this month that directed several federal agencies to dedicate more attention to the study and prospective regulation of digital assets.
