US Regulator Calls For Stablecoin Bank Regulation, Coordinated Regulatory Approach To Crypto - Aliens: AI Crypto News & Markets Updates

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US Regulator Calls For Stablecoin Bank Regulation, Coordinated Regulatory Approach To Crypto

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Cryptonews

Fri, Jan 14, 2022

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The official argues that stablecoins play a critical role in facilitating the growth of decentralized finance ( DeFi ), and as such, they could be considered the “oxygen of the crypto ecosystem.” However, they also present unique risks, and these risks are particularly relevant to stablecoins “with questionable or opaque reserve management practices,” according to Hsu. Nonetheless, he said, “Fortunately, we have an effective tool to mitigate run risk: bank regulation.

Stablecoin issuers subject to bank regulation would give holders of those stablecoins confidence that those coins were as reliable and 'money good' as bank deposits.” Hsu argues that bank regulation would give credibility to the 'stable' part of 'stablecoin', while regulation of their issuers as banks may enable further innovation in crypto and "make those innovations more durable.” The OCC chief also said that cooperation and coordination among regulators was necessary to keep up and respond effectively to crypto’s expansion throughout the financial system.

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