WASHINGTON, Nov 1 (Reuters) – A U.S. Treasury Department-led regulatory body called on Monday for Congress to regulate issuers of “stablecoins” like banks and urged financial agencies to assess whether the role of these fast-growing digital assets in the country’s payments system posed a systemic risk.
The hotly awaited report by the President’s Working Group on Financial Markets will likely boost policymakers’ efforts to put guardrails around stablecoins, a type of digital asset pegged to traditional currencies which the body said could pose threats to the broader financial system.
Stablecoins, which include the likes of Tether, USD Coin and Binance USD,have ballooned 500% to reach a market cap of $127 billion over the past 12 months, according to the report.
“The rapid growth of stablecoins increases the urgency of this work,” the report stated. “Failure to act risks growth of payment stablecoins without adequate protection for users, the financial system, and the broader economy.”