The President’s Work Group (PWG), which includes several top U.S. financial regulators, has recently released a new statement on stablecoins on December 23, 2020. It has been seen that stablecoins remained the major topic of the statement.
There were representatives from the U.S. Treasury Department, the Federal Reserve, the Commodity Futures Trading Commission (CFTC), and the Securities and Exchange Commission (SEC). The U.S. authorities have been assessing the evolving landscape, both technological and market for stablecoins.
PWG Releases Statement and Emphasizes on Risk Management With Stablecoins
As PWG releases statement, it has emphasized many different points related to stablecoins. Justin Muzinich, Treasury Deputy Secretary, has said:
“The statement reflects a commitment to both promote the important benefits of innovation and to achieve critical objectives related to national security and financial stability.”
He also mentioned that the regulators will closely examine all the stablecoin arrangements and will be giving further dialogues regarding the same.
According to all the PWG members, the digital payments including the stablecoin are having huge potential to increase efficiency along with lowering the cost. Along with this, they have also emphasized the huge need for risk management and maintaining the stability of the monetary systems with stablecoins.
Need For Additional Safeguards
While releasing the statement, PWG members have mentioned that due to the risk associated with stablecoins, there might be a need for additional safeguards. These will be required to ensure financial stability and integrity along with user protection and many other factors. It is also hoping to ensure market integrity, well-functioning trading markets, and enhanced cross-border cooperation.
The regulators have not mentioned whether the stablecoins are currency or commodities, however, they said that it will solely depend on the design and many other factors contributing to how the regulations will be formed.