The Treasury Department said on Monday that congress should give federal regulators more authority to regulate stablecoins, a fast-growing form of cryptocurrency.
Currently, stable coins are not overly regulated, but CNBC reported they could transform how Americans pay for things, such as haircuts and gasoline.
According to CNBC, regulations could “encourage faster, more efficient, and more inclusive payments options,” said President Biden’s Financial Advisory Group, which includes the President’s working group on financial markets.
In addition, the report notes that stablecoins may become widely used rapidly due to network effects or relationships between stablecoins and existing platforms or user bases.
Cryptocurrencies like stablecoins – which are designed to maintain their price over time with a flat currency, like a dollar – are not always backed, so regulators believe that they are harmful to customers and the overall financial system.
According to The New York Times, “the growth of stablecoins implies a greater need to take action,” the report said. “Failure to act risks growth of payment stablecoins without sufficient protection for users, the financial system, or the broader economy.”
According to Business Insider, stablecoins are often viewed as a better investment since they are less volatile.
Business Insider spoke to Paul Brody, principal and global blockchain leader at Ernst & Young. “In an ecosystem like cryptocurrencies, volatility is typically high, so this property is crucial,” Brody said.
“This is how you can benefit from blockchain technology without being exposed to volatile crypto prices.”