US lawmakers are near to completing an agreement on stablecoins, according to Maxine Waters.

Waters announced that an agreement has been reached with the federal government to establish regulatory supervision in the US stablecoin market.

The US is Close to Reaching a Deal on Stablecoin Regulations, Says Congresswoman Maxine Waters 💼💰

Congresswoman Maxine Waters has revealed in an interview with Politico that lawmakers in the United States are making progress on stablecoin regulations. After months of effort and negotiation, Waters and the head of the House Financial Services Committee, Patrick McHenry, are reportedly close to reaching a deal.

🔒 Apply Federal Reserve Control

The discussion on US stablecoins revolves around the idea of the Federal Reserve having market oversight and control over their issuance and availability. Waters believes that the central bank should have the power of oversight in this matter. She stated, “Our central bank should have the power of oversight, and should have the ability to be at the head of this.”

📜 The Need for Stablecoin Regulation

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Many government stakeholders agree that the stablecoin market requires regulation. US Secretary of the Treasury, Janet Yellen, recently emphasized the importance of fixing regulatory inadequacies in the cryptocurrency market to protect investors and the financial market from potential risks. Yellen, who heads the Financial Stability Oversight Council, stated that crypto regulation, including regulation on stablecoins, is critical.

Jeremy Allaire, the CEO of Circle, also supports the idea of stablecoin regulation. Allaire expressed his optimism at the chance of stablecoin legislation in 2024, stating that there is a “very good chance” of it happening. He pointed out that other countries have already taken steps to regulate stablecoins issued against their currencies.

🌐 UN Report Highlights the Need for Regulation

A recent report from the United Nations (UN) has drawn attention to the use of stablecoins for criminal activity. The UN’s Office of Drug and Crime Unit noted that Tether’s USDT has become the preferred asset for money laundering and related crimes in Asia. Criminals have also been using stablecoins for scams, such as pig butchering, where they convince people to make increasing contributions to a fake relationship or investment using cryptocurrencies.

💡 Q&A Section:

1. 🤔 Why do stablecoins need regulation? Stablecoins need regulation to protect investors and the financial market from potential risks. Without regulation, stablecoin issuers may not have appropriate safeguards in place, leading to potential abuses and instability in the market.

2. 💡 What is the role of the Federal Reserve in stablecoin regulation? The Federal Reserve’s role in stablecoin regulation would be to provide market oversight and control over the issuance and availability of stablecoins. This would help ensure that stablecoins operate within regulatory boundaries and maintain stability in the financial system.

3. 💰 Are there any benefits to stablecoin regulation? Yes, stablecoin regulation can provide benefits such as increased investor protection, improved market transparency, and reduced risks of money laundering and illicit activities. Regulation can also help promote the growth and mainstream adoption of stablecoins by instilling confidence in the market.

4. 🌍 How do other countries regulate stablecoins? Different countries have varying approaches to stablecoin regulation. Some countries have established comprehensive regulatory frameworks, while others have taken a more cautious stance, closely monitoring and evaluating the risks and benefits before implementing specific regulations. It is important for countries to strike a balance between innovation and safeguarding financial stability.

5. ⏳ What is the timeline for stablecoin regulation in the US? The timeline for stablecoin regulation in the US is uncertain. While there is progress being made, it is difficult to predict when specific regulations will be implemented. However, with increasing discussions and awareness about the need for regulation, it is expected that stablecoin regulations will come into effect in the near future.

📚 Reference Links: 1. Interview with Politico 2. Janet Yellen’s Testimony 3. UN Report on Criminal Activity

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