Stablecoins as a means of payment deserve consideration; the FDIC is looking to gather more information for proper regulation of banks with respect to cryptoassets. This stated by the acting head of the agency, Martin Gruenberg.
The official flagged the current state of affairs:
“As soon as the risks associated with certain cryptocurrencies become more acute, either the underlying technology changes, or the use case or business model shifts. New digital assets regularly enter the market with differentiated risk profiles. In the end, superficially similar appearances can conceal substantially different risks.”
Expanding industry data will allow the FDIC to provide feedback through letters that banks should use to inform the agency of their activities. Clients and insured institutions also need a better understanding of how the agency operates, he added.
The official stressed that the absence of demonstrated value of stablecoins beyond the crypto ecosystem deserves attention. He urged not to create barriers, despite the planned in 2023 debut of a payments system from the Fed under the name FedNow, which does not use blockchain.
In Gruenberg’s view, payment-stablecoins could “radically transform the banking landscape.”
Most of the potential changes he tracked, in his view, were negative in nature. This occurred even under prudent regulation, full asset backing, and the use of exclusive blockchains.
Gruenberg named consolidation and removal of intermediaries in the banking system (especially in local financial institutions), as well as the elimination of lending intermediaries. The latter could lead to “the creation of a new type of shadow banking,” he added.
In September, ForkLog reported that a bill being drafted in the U.S. House of Representatives to regulate “stablecoins” would bring issuers of fiat-backed stablecoins under the supervision of the FDIC and OCC.
In April, the head of the OCC, Michael Hsu, urged to treat issuers of “stablecoins” as depository institutions with mandatory deposit insurance.
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