According to an official of the U.S. Treasury, Nellie Liang, the regulators are ready to work on their authority if the legislation is not enacted by Congress.
Laws Concerning Stablecoins
The Treasury of the United States has signalled the enactment of new regulations concerning stablecoins. Hints provided on 17th Dec were shared by the Under Secretary of the Treasury for Domestic Finance. He hinted at the speculations concerning the stablecoin laws by making comments like “considerable risk” for investors on the use of stablecoin.
The clues were further shared through the report of the Financial Stability Oversight Council November 2021. This report has a major emphasis on stablecoins and highlights the oversight of the top hierarchy in the U.S Treasury. Their oversight states that in case Congress will not implement the legislation, the regulators are going to deploy their authority in the case matter.
Limited Powers of the Treasury
The Treasury of the United States of America owns limited authority and hence, a comprehensive stablecoin regulation requires a congressional inclusion in the decision-making process. Considering Treasury’s regulatory powers, Liang highlighted that they can make little changes, however, if the concerned regulations affect the foundations of the crypto assets and remain unstable, it could be a major risk. The regulations can influence preferred options of scalpers, leverage users to further use stablecoins in making entry and exit from the crypto assets.
Tether & Dispute over Regulations
Some concerns were also highlighted concerning Tether (USDT). It’s the leading stablecoin with a market capitalization of more than $75 billion. Despite the stablecoin being fully backed by an accounting network based in the Cayman Islands, Tether Holdings Limited are in a dubious situation following their widespread utility.
Other than this, regulators also have concerns regarding investors’ dependency on stablecoin could trigger havoc in the market. Yet, the comments made by Liang highlighted a sense of dispute between the Treasury and Congress.
