Bloomberg Law
Nov. 12, 2021, 11:00 AM

Biden’s Stablecoin Oversight Plan Leaves States Out in the Cold

Lydia Beyoud
Lydia Beyoud
Corporate Governance Reporter
Evan Weinberger
Evan Weinberger

The Biden administration’s proposal to require stablecoin issuers to become federally insured banks would force state regulators to change their bank-chartering options or get left behind.

A recent report from the President’s Working Group on Financial Markets found “key gaps” in the oversight of stablecoins—cryptocurrencies pegged to the dollar and other national currencies—that would leave federal regulators powerless to intervene if instability in the $130 billion market triggers a broader financial crisis.

The working group proposed that stablecoin issuers, such as those that issue Tether, US Dollar Coin and Dai, become federally insured depository institutions, subject to the same oversight ...

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