On November 1st, 2021, the President’s Working Group on Financial Markets (PWG) released a report on stablecoins, highlighting their tremendous benefits and potential risks. To put this report into context, Chainalysis’ Head of Public Policy Salman Banaei led a two-part discussion with senior U.S. Treasury official Matt Swinehart and two members of Congress—Jim Himes (D) (CT-4) and Tom Emmer (R) (MN-6).
Below, we’ve summarized the key takeaways.
In part one of the discussion, Matt Swinehart, Acting Deputy Assistant Secretary of the Treasury for International Financial Markets, provided an overview of the stablecoin landscape, its risks, and PWG’s recommended response.
The report discussed the uses of stablecoins under two headers:
“The United States strongly supports responsible innovation,” Swinehart explained. “If well designed and appropriately regulated, stablecoins could contribute to important payment system objectives, like efficiency, resiliency, and inclusion.” But there are, of course, risks.
The report went on to describe several customer protection and market integrity concerns associated with stablecoins:
To allay these concerns, the report recommends that Congress enact legislation that would: