WASHINGTON—As Congress considers a path for nonbanks to be allowed to issue stablecoins, one Treasury official says there will be no objections from agencies that once recommended issuers be regulated as banks.
The position was shared by Nellie Liang, the U.S. Treasury Department’s undersecretary for domestic finance.
The President’s Working Group on Financial Markets, which recommended last year that stablecoins belong inside the regulated banking industry, didn’t mean to be overly rigid about how crypto firms might hit that mark, Liang explained during a recent Financial Services Forum event in Washington, CoinDesk reported.
“There’s some flexibility under that framework,” she stated. “It’s meant to be open. It was not meant to limit to current banks.”
About Deposit Insurance
While the Treasury and the regulators in the working group want all stablecoin issuers to be regulated for safety and soundness, just like regular banks are, she said they shouldn’t have to have depository insurance and could be subsidiaries or affiliates of bank holding companies, CoinDesk said.
“What we wanted to do was bring it into the banking system,” Liang said, before clarifying, “Banking system – not necessarily deposit insurance.”