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Tether, Facebook Coin Spur Worry at Yellen’s Closed-Door Meeting

July 27, 2021, 4:24 PM

Tether and the Facebook Inc.-backed Diem token were a main focus of a recent meeting U.S. regulators held on the financial risks posed by stablecoins, a fast-growing corner of the cryptocurrency industry, said people familiar with the matter.

The President’s Working Group on Financial Markets, a team of watchdogs led by Treasury Secretary Janet Yellen, was particularly concerned about Tether’s claims that it holds massive amounts of commercial paper -- debt that companies issue to meet their short-term funding needs, the people said. Participants likened the situation to an unregulated money-market mutual fund that could be susceptible to ...