Biden Administration Calls For Stablecoin Regulation: Report

The administration of President Joe Biden called for the regulation of stablecoins in a recent report.

What Happened: The President’s Working Group on Financial Markets admitted that stablecoins could “support faster, more efficient, and more inclusive payments options" but also highlighted the need to regulate them in a recent report, according to a Monday CNBC report.

The report reads that “the transition to broader use of stablecoins as a means of payment could occur rapidly due to network effects or relationships between stablecoins and existing user bases or platforms.” Consequently, Biden’s economic advisors said the U.S. Congress must regulate stablecoins to protect and inform investors, issuers and exchanges. 

The Biden administration recommends that stablecoin issuance should be limited to insured banks, which would increase the regulator's control over this asset class.

In a Monday press release, U.S. Securities and Exchange Commission Chairman Gary Gensler said that stablecoins need to be monitored to prevent them from bankrolling criminal activities. Gensler is also a member of the President’s Working Group on Financial Markets.

The report recommends that “Congress act promptly to enact legislation to ensure that payment stablecoins and payment stablecoin arrangements are subject to a federal prudential framework on a consistent and comprehensive basis.” 

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