By Shelly Melancon (Switzerland)
The US’ Urban Affairs Committee will meet with the US Senate next week to hold a hearing about stablecoins. Any interested persons can join the meeting live via the committee’s website. Alexis Goldstein and Hilary J. Allen are confirmed as witnesses to this hearing.
Critical Examination of The Stablecoin Industry Continues
The meeting was convened after Sherrod Brown (Senate Banking committee head) letter to stablecoin stakeholders on November 23. The letter requested clarification from these stakeholders on stablecoin matters relating to issuance, trading, and redemption.
Some letter recipients include TrustToken, Coinbase, Binance, and Gemini. An earlier discussion between the congress and some of the stakeholders mentioned above has taken place. The US treasury beamed its scrutiny on the stablecoin industry, stating that the government must perform an oversight function on this sector in the first week of last month.
Likewise, the president’s working group issued a statement instructing lawmakers to ensure that only banks are legally permitted to issue stablecoins. Recently, USDT issuer (Tether) increased its supply of USDT, which contributed to the rising circulation supply of stablecoins.
CoinGecko data shows that the market cap of the stablecoin is now up to $161B (a new peak record). USDT is responsible for about 49% of that amount as its circulating supply is now almost 77.5B, with USDC and BUSD rounding off the top three stablecoins. A few months ago, a US financial watchdog investigated Tether over claims that its stablecoins are dollar-backed.
Japan To Enforce Legislation On Stablecoin Issuers
In other stablecoin-related news, Japan is proposing a policy to ban stablecoin issuers not duly licensed by the nation’s financial service agency (FSA). A Nikkei Asia report revealed that Japanese authorities (like the US) want to restrict stablecoin issuance to only the financial services industry. The FAS claims that this restriction will significantly protect customer interests and reduce risks.
Consequently, popular stablecoin issuers like Tether would need to become a licensed financial service operator in Japan before they can be allowed to issue stablecoins to firms and private individuals. The Nikkei Asia report further stated that the FSA still plans to perform oversight functions over wallet providing firms and other sectors involved in crypto-related transactions.
In the meantime, there are rumors that more than 65 Japanese financial institutions would trial a Bank-supported stablecoin (temporarily named as DCJPY) this year to launch fully in 2022. The financial institutions, collectively known as the Digital Currency Forum, consist of leading financial institutions. However, Japan’s apex bank and financial watchdog (the FSA) have clarified that they would only be observers of the pilot phase.
Omarova Withdraws
On a positive note, Saule Omarova, has withdrawn his nomination to head the occ. The news is good because Omarova is a strong critic of the crypto industry.
No sooner had President Biden announced her nomination than Omarova started receiving several attacks on her personality. Also, most Republicans and Democrats opposed her nomination based on her antecedents as a strong critic of the digital asset sector.
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