In brief
- The Chamber of Digital Commerce has said that stablecoins do not require bespoke regulations.
- These claims are at odds with several key political figures and institutions in the U.S. and the U.K.
The Chamber of Digital Commerce has said that retail-focused and dollar-pegged stablecoins should not face new or bespoke regulations “simply because new technology is being deployed,” per Reuters.
The organization—whose members include Goldman Sachs, Citigroup, Tether, and Circle—also said stablecoins are not “at significant scale” to merit a “separate, compulsory regulatory regime.”
The Chamber’s comments come at a time when stablecoin regulation—and regulation of the crypto industry more broadly—remains a hot topic.
Regulating stablecoins
The Chamber of Digital Commerce claims about stablecoins and regulation are at odds with others looking at the crypto industry from the outside.
Earlier this week, Fitch Ratings—one of the “Big Three” credit rating agencies—issued a warning on stablecoins.
“Fitch Ratings believes stablecoins that approach a systemically important scale could come to play an important role in short-term securities markets, such as commercial paper, while bringing new risks to these markets,” the agency said.
Fitch Ratings is not the only observer to sound off on this brand of cryptocurrencies. The U.S. Treasury Secretary Janet Yellen met with multiple federal agencies earlier this year to carve out a regulatory approach that would govern stablecoins. Yellen, at the time, emphasized the need to “act quickly.”
Janet Yellen: We Must 'Act Quickly' on Stablecoin Regulation
U.S. Treasury Secretary Janet Yellen met with the heads of multiple federal agencies on Monday to discuss how to regulate stablecoins, a type of digital currency whose value is pegged to another currency. Yellen, flanked by Federal Reserve Chair Jay Powell and Securities and Exchange Commission (SEC) Chair Gary Gensler, called together a closed meeting of the President's Working Group on Financial Markets (PWG). Other participants included the heads of the Commodity Futures Trading Commission (C...
Reserve Chair Jerome Powell also believes that stablecoins need to be regulated. From his purview, they ought to be regulated in a similar way to bank deposits and money market funds.
The deputy governor for financial stability at the Bank of England, Sir Jon Cunliffe, would also conceivably disagree with one of the Chamber’s premises, namely that stablecoins are too small an industry to merit bespoke regulations.
Addressing the broader crypto industry earlier this month, Sir Cunliffe said cryptocurrencies could trigger financial instability despite accounting for just a small share of the global financial system.
Bitcoin Could ‘Trigger’ Financial Instability: Bank of England Exec
Sir Jon Cunliffe, deputy governor for financial stability at the Bank of England (BoE), has said Bitcoin—and other cryptocurrencies generally—could cause a financial crisis unless they face tough government-led regulations. Sir Cunliffe says this is true despite the fact the crypto industry accounts for only a small percentage of global finance. “Of course $2.3 trillion needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’...
“Of course $2.3 trillion needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don’t have to account for a large proportion of the financial sector to trigger financial stability problems,” Sir Cunliffe said.
