Regulators eyeing stablecoins - worried about hidden danger to financial system stability

Jan

Who's the Boss?
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May 24, 2010
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5,816
Cryptocurrency ticking timebomb

Regulators are worried about hidden risks to investors and even the financial system stemming from a fast-growing corner of the crypto market meant to be immune from volatility.

Their focus is on so-called stablecoins, a form of cryptocurrency that has a fixed price, typically one dollar, and is backed by real-money reserves.

At the end of May, the total market capitalization of stablecoins, which include ones offered by crypto firms Tether and Centre, broke $100 billion.

But in recent weeks, lawmakers and officials from the Federal Reserve and the administration have expressed alarm both in public and private that some consumers won’t actually be protected should one of the firms not have the backing they purport to have. They also say the growing size of stablecoins has created a situation where huge amounts of U.S. dollar-equivalent coins are being exchanged without touching the U.S. banking system, potentially blinding regulators to illicit finance.
 

SureThing

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Jun 26, 2018
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Interesting short video I found on the Tether situation.

Interesting indeed. It is common in the history of revivals that mental alertness always precedes political and social activity.
 

krycor

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Aug 4, 2005
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inflation brings all the attention to the coins and they like we stable, we solid.. and we like show us the reserve and and audit.

FED post meeting press conference at 20h15.. will they take action or not ? will Powell not screw up Q&A and how will the stock market react.
 

Swa

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May 4, 2012
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Can say the same as with banks. First it was Saamverloor then Africantank and then VBS. Which one is next? The question isn't what the risk is but what are you going to do to mitigate that risk?
 
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