Should regulation start with stablecoins?

Should regulation start with stablecoins?

This week, the US government released a report on crypto. The paper highlights their potential to negatively impact the stability of traditional financial infrastructure. It was widely commented on by players in traditional finance and those in new fintech. Some saw it as a realistic representation of the current situation. Others see it as a disturbing document. However, each has brought solutions to the success of the regulation. What is Jay Cla0yton’s take on the matter?

Stable coins first, the rest later!

In an interview he gave to CNBC, former head of the United States Securities and Exchange Commission (SEC), gave his take on the debate surrounding digital assets. Jay Clayton said crypto regulation should start with stablecoins. Given their popularity, does he think, stablecoins may be the easiest product in the industry to tackle. Thus, their review and regulation could be easier in the overall effort to regulate the sector.

“When I talk about the challenge, I mean the rapid introduction of this technology into our traditional financial system. In fact, I think a good first step would be to regulate stablecoins (…) Today we have things called stablecoins, which are anything but unstable coins.” he explained. Then he added: “If you’re going to have a digital asset that’s really pegged to the US dollar, you have to have regulations around that. It’s very prescriptive about what’s not a title and what’s really stable. I think that would be a good first step.”.

In view of the government’s new report on the danger of crypto, the former leader specifies that the initial framing of stablecoins would reduce the risks of exposure to the US economy.

Stablecoins are cryptocurrencies whose value is tied to a stable safe haven, such as gold or the dollar. For Jay Clayton, their stable nature makes them easier assets to manage than others. He calls on the competent authorities to look first from this side. This is to protect the US economy from the dangers mentioned in a recent government report.

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Luke Jose Ajinaku's avatar
Luke Jose Ajinaku

Far from dampening my enthusiasm, a failed cryptocurrency investment in 2017 only increased my enthusiasm. So I decided to research and understand the blockchain and its many uses and to impart with my pen information related to this ecosystem.

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