The regulator has turned his gaze to stabilize coins?

Stabilization currency is a digital currency that is hooks with an asset (e.g., dollar) of value fluctuations, so it is more consistent than the encrypted currency. Stabilization coins can also be hooked with the price of the goods, such as gold, and achieve price stability by mortgage or through the algorithm mechanism of the sale of the assets or its derivatives.

The popularity of stabilization currency has increased because they are a cheap and simple encrypted currency trading method. But the concerns of legislators and the Fed officials are intensifying, because there is no standard disclosure or reporting requirements, it is difficult to know what the assets behind stability coins are difficult to track their usage.

In July this year, the US Federal Open Market Committee meeting expressed concerns about stabilization currency. The conclusion that participants concluded that they were “new financial arrangements”, which seems to have the same structure as the main currency fund “and Liquid transformation fragility, but is low in transparency. They emphasized the vulnerability associated with stable coins and universal lack of transparency, closely monitoring their importance and the need to develop appropriate regulatory frameworks.

However, the stable coin issuer is not regulated by the full frame, and they provide different degrees of transparency to support the reserves of its stable coins. Bank of America estimates that the market value of stabilization currency is approximately $ 141 billion, and the quarterly trading volume of 2021 exceeds 10 billion US dollars. According to the research platform Delphidigital data, the largest stable coin Tether has a market value of $ 76 billion.

In November, the President’s Financial Market Working Group, the Federal Deposit Insurance Company and the Monetary Supervision Department issued a report on stabilization coins. These agencies suggested that the encrypted currency company issued by the release of stable coins as a bank and suggested that the Congress will supervise it according to the degree of risk of stabilized currency issuers on the user and financial system.

The stability of stabilization coins is an illusion. TetherHoldings borrowed funds from its reserves to support the attached encrypted currency exchange, which means that funds that support stabilization currency may not be true. The risks and challenges facing regulators are that due to the large number of stable coins, the supervision of these stable coins may raise the issuer who wants to prevent prevention.