Regulators have placed a target on Stablecoin as a result of some actions taken in the financial regulator group chat. Since the mention of Stablecoin from worldwide officials, the coin has been in constant flux. Janet Yellen made the conversation live over Twitter the other day as she spoke with prominent financial officials to discuss the future of the cryptocurrency.
Stablecoin as a cryptocurrency value is very different than other types of cryptocurrencies like bitcoin or etherium because it’s tied directly to a government body and more regulated like an assets such as gold. Many worldwide financial regulators remain unsure about cryptocurrency with Bitcoin scams running rampant online. With over $100 billion in Stabecoin currently out on the market there are many owners of the coin that are eagerly awaiting the decision of next week’s meeting.
Why the decision is so important:
if there’s any type of financial oversight in these coins that are tied to the US dollar it may be difficult to get a stable value on the coin. Finding a way to regulate the cryptocurrency market has been difficult and even with a coin that is tied to regulators in the US government, there needs to be some form of stability that returns to the market.
The Federal Reserve chair Jerome Powell spoke to Congress this week and suggested that the US should launch its very own central bank of digital currency or CBDC to manage the 11k+ cryptocurrencies that are in current circulation.
Almost every government branch dedicated to finance including the Department of Commerce, Department of Homeland Security, treasury and the Department of State outline the risks associated with crypto. As the Chinese government continues to tighten its grip on global finances the US government has suggested that in order for the future of finance to thrive, there needs to be improvements when it comes to electronic surveillance and compromises in data security. Businesses will need to establish risks regarding transparency and there needs to be improvements to security to prevent critical businesses from shutting down.
In the Chinese market a new Chinese national security law targeting political dissidents coupled with a deteriorating press freedom will make it difficult for private companies to work within the market. It will be essential for worldwide businesses to create informed decisions while properly assessing risks with crypto, finance and security moving forward. Many American businesses are eyeing an exit seeing some of these signs but until we see more regulation and finance, improved security and greater information regarding international business relations in business, we will continue to see volatility and risk with Stablecoin.