Cryptocurrency discussed by US treasury, financial industry

The U.S. Treasury Department met with a number of industry participants, for quiz. That was about the risks and benefits posed by stablecoins. Washington policymakers are alarmed at the rapidly expanding cryptocurrency market. The record exceeded $2 trillion in April. The market cap of stablecoins stood at roughly $125 billion. This is according to the industry data site CoinMarketCap.

U.S. financial regulators are working to understand the risks and opportunities of the cryptocurrencies. They said that they will report all the issues in the upcoming months. In July, Treasury Secretary Janet Yellen said that the government must move quickly to establish a regulatory framework for stablecoins. Treasury officials after meeting with financial industry executives, will discuss about the potential stablecoin regulation. Officials asked whether stablecoins would require direct oversight and also discussed how regulators should try to mitigate the risks. This also includes, whether major stablecoins should be backed by traditional assets.

About the structure of the stablecoins, usage, sufficiency of the framework, safety and other soundness issues were asked to the officials. Treasury officials also met with a group of banks and credit unions. That also involved to discuss similar issues. They are gathering further information. The information gathered from this meeting is likely to help shape a broad Treasury report on stablecoins. Treasury spokesman John Rizzo stated that the department is examining potential benefits and risks of stablecoins for users, markets, or the financial system. He also added that this work continues, and the Treasury Department is meeting with a broad range of stakeholders, including consumer advocates, members of Congress and market participants.

The rise in privately-operated currencies could undermine their control of the financial and monetary systems, increase systemic risks, promote financial crime, and hurt investors. The U.S. Securities and Exchange Commission, the Commodity Futures Trading Commission, the Federal Reserve and the Office of the Comptroller of the Currency are also working on cryptocurrency projects.