(Retweet) What principles should be followed in formulating stablecoin policies?
First, stablecoins are not banks or money market funds (MMFs).
In essence, a risk management framework applicable to stablecoins should aim to manage the unique risks associated with stablecoins that do not arise in traditional banking;
Also, just as MMFs are regulated differently from other investment firms because of their structure and purpose, stablecoins should be regulated with a unique structure and purpose.
Different risks and uses should have different frameworks, and stablecoins should not be stuffed into unsuitable regulatory frameworks.
If legislative work in this area continues to move forward, lawmakers should track three key goals:
1) Protecting consumers: In the case where stablecoins are allowed to be issued by centralized suppliers, regulation should ensure that assets cover unencrypted circulation, etc., but does not require the issuer to be a bank;
2) Promote growth and competition: Banks and non-banks should compete at the federal and state levels to improve quality and reduce costs;
3) Encourage innovation: allow for a range of stablecoin designs, rules should be adjusted according to risk level and coverage, rather than prohibiting or outlawing certain rules, experimentation is key (eg algorithm, on-chain) other jurisdictions are advancing stablecoins The U.S. may have concerns about the rules, which will harm the interests of U.S. consumers and detrimental to the status of the U.S. dollar as the main international reserve currency.
