On Nov. 1, 2021, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation (FDIC) joined with the president’s Working Group on Financial Markets (PWG) to release the much anticipated Report on Stablecoins (the “Report”). The Report (i) discusses the background of stablecoins and their functions, (ii) identifies and assesses the risks and certain regulatory gaps of stablecoins, and (iii) makes certain legislative and other recommendations to address such gaps and perceived risks.
This GT Alert Covers the following:
- What are stablecoins, and how they are created, redeemed, transferred, and stored.
- The risks and regulatory gaps related to stablecoins identified in the Report.
- PWG’s recommendations to Congress on legislation to address market risks potentially created by stablecoin transactions.
- How the agencies forming the PWG intend to continue to use their existing authorities to address potential prudential risks related to stablecoins.