Stablecoin issuers like Tether and Circle could soon be subject to bank-like regulations, according to a report from the Wall Street Journal.
The reported recommendation is part of a Treasury-led presidential advisory group’s upcoming stablecoin report. First announced in July, the report is now expected to be released in late October.
A senior administration official confirmed that the claim is correct and that the federal government is considering two options. The first is the Congressional path indicated by the WSJ, albeit no specifics were provided. The second method is through the Financial Stability Oversight Council (FSOC), a body of regulators tasked with monitoring potential financial system vulnerabilities.
The announcement comes as Congress becomes increasingly concerned about the lack of regulation in the $130 billion stablecoin sector.
Senator Cynthia Lummis (R-Wyo.) advocated for frequent audits of stablecoin issuers and voiced concern about the lack of transparency surrounding big issuers' reserve backings in a floor speech on Wednesday. Stablecoins may be categorised as securities under US law, according to Securities and Exchange Commission (SEC) Chair Gary Gensler, subjecting them to more regulatory scrutiny.
A number of stablecoin issuers are pursuing or have declared their plan to pursue bank-like regulatory status. Circle said in August it wants to be a national crypto bank; Paxos, which issues USDP (formerly PAX) and BUSD in partnership with Binance, got a conditional banking charter in April.