Stablecoin issuers including Tether and Circle could soon be subject to bank-like regulations, according to a report from the Wall Street Journal.
The reported recommendation is part of a Treasury-led presidential advisory group’s upcoming stablecoin report. First announced in July, the report is now expected to be released in late October.
A Treasury spokesperson declined to comment.
A senior administration official confirmed to CoinDesk that the report is accurate and that the federal government is looking at two different pathways. The first is the congressional pathway outlined by the WSJ, though the official did not provide specifics. The second is through the Financial Stability Oversight Council (FSOC), a panel of regulators tasked with monitoring potential risks to the financial system.
The news comes as Capitol Hill grows increasingly concerned about the lack of regulation in the $130 billion stablecoin market.
In a floor speech on Wednesday, pro-crypto Sen. Cynthia Lummis (R-Wyo.) called for regular audits of stablecoin issuers and expressed concern with the lack of transparency of major issuers’ reserve backings. Securities and Exchange Commission (SEC) Chair Gary Gensler has suggested that stablecoins might be classified as securities under U.S. law, thus subjecting them to more regulatory scrutiny.
A number of stablecoin issuers are in the process of, or have stated intentions to, obtain bank-like regulatory status. Circle said in August it wants to be a national crypto bank; Paxos, which issues USDP (formerly PAX) and BUSD in partnership with Binance, got a conditional banking charter in April.
Nikhilesh De contributed reporting.
This is a developing story and will be updated.