Certain stablecoins could fall under the FDIC’s $250,000 insured deposit coverage, according to CoinDesk, citing informed sources.<\/p>\n
The discussions are preliminary, and no timeline for a decision has been set.<\/p>\n
The agency is also examining the option of direct deposit insurance for stablecoin issuers.<\/p>\n
\n\u201cFDIC will integrate stablecoins into the banking system. If backing is a reserve at the Fed<\/span>, then the argument that this is a deposit could hold. If backed by U.S. Treasuries, such an interpretation would be more difficult,\u201d<\/em> explained one of the sources.<\/p>\n<\/blockquote>\n
At present, blanket deposit insurance covers fiat deposits held with crypto exchanges, but it does not extend to stablecoins.<\/p>\n
One interviewee pointed to potential difficulties in insuring holders of tokens due to the need to monitor their transactions on open blockchains. Another said that the FDIC\u2019s task is not to expose the Deposit Insurance Fund to excessive risk.<\/p>\n
Sources did not rule out that the agency will solicit public comment before any policy changes.<\/p>\n
According to reports, the Biden administration is considering the same requirements that apply to banks<\/a> for stablecoin issuers. It is possible they would be required to comply with provisions of a specially crafted charter.<\/p>\n
In September, the U.S. Treasury sought to require stablecoin issuers to ensure their free convertibility into fiat<\/a>. Earlier, officials discussed<\/a> with representatives of banks and credit unions the risks and benefits of stablecoins.<\/p>\n
In July, a meeting of the President\u2019s Working Group on Financial Markets took place. Its members discussed<\/a> the rapid growth of stablecoins, their use as a means of payment, and the potential risks to end users, the financial system, and national security.<\/p>\n
Gary Gensler described stablecoins as \u201cpoker chips for poker in a Wild West casino\u201d<\/a>, and in the U.S. Senate they spoke of the need for full cash backing of these digital assets.<\/p>\n
Powell has said that the agency does not intend to ban cryptocurrencies, but plans to bring stablecoins under the regulatory umbrella.<\/p>\n
In August, the issuing consortium Centre said<\/a> it planned to move the reserves of the token into dollars and U.S. Treasuries.<\/p>\n
The issuer of the stablecoin USDT, Tether Limited, in a July report stated that the share of cash and bank deposits redeemable in two days or less amounted to about 10%<\/a>.<\/p>\n
Paxos, the issuer behind Pax Dollar (formerly Paxos Standard), confirmed<\/a> 100% backing of every issued USDP and BUSD in dollars and equivalents.<\/p>\n