US Treasury says stablecoins should be regulated like banks

Illustration by Alex Castro / The Verge

The US Treasury Department is urging Congress to pass legislation that would require stablecoins to be issued by banks subject to federal banking laws in a new report (.pdf) from the President’s Working Group on Financial Markets, a panel headed by Treasury Secretary Janet Yellen.

The report recommends legislation that would guard against stablecoin runs, address concerns about payment system risk, and address additional concerns about systemic risk and economic concentration of power.

A stablecoin is a type of cryptocurrency typically backed by a fiat currency like the US dollar or the Euro, though it may also be backed by a basket of investments; the “stable” part comes from how the coin is pegged to its backing. Stablecoins are used...

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