Treasury preps stablecoin framework as officials fear stability, redemption risks: report

Treasury preps stablecoin framework as officials fear stability, redemption risks: report

Citing anonymous sources, Bloomberg reports that a coming Treasury report on stablecoins will highlight risks like the inability to redeem stablecoins for their underlying assets and potential runs on crypto assets as major concerns.

The Treasury report on stablecoins is highly anticipated. Hitherto, stablecoin regulation in the U.S. has happened almost exclusively at the state level. The coming report is expected to set the framework for a new federal approach to the industry.

Fiat-backed stablecoins, and especially those tied to the value of the U.S. dollar, are some of the most traded crypto assets on the market. There are, however, major concerns about the nature of their actual backing and their use in manipulating markets.

Under Secretary Janet Yellen, the Treasury and other financial regulators have been scrutinizing stablecoin operators closely.

Alongside the coming report from the Treasury, the Financial Stability Oversight Council is reportedly considering launching an investigation into the threat that stablecoins pose.

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