On Friday, U.S. Treasury Secretary Janet Yellen said there would be a President’s Working Group on Financial Markets (PWG) meeting today to discuss stablecoins.
The PWG includes herself and the heads of the Federal Reserve, the SEC and the CFTC. Fed Chair Jerome Powell highlighted the need for better regulation of stablecoins during Senate testimony last week. The PWG said it would examine existing regulations, explore risks and make recommendations about how to address those risks.
The Boston Federal Reserve also recently highlighted the (poor) quality of the assets that back the Tether stablecoin, as well as the similarity of stablecoins to money market funds. That’s a market that has needed two interventions in recent years and was the topic of a PWG discussion earlier this year. Fitch ratings echoed these concerns.
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