The President’s Working Group Report on Stablecoins is an important first step for federal regulators to develop a regulatory approach. Unfortunately, the report is a slap in the face to state regulators as it ignores their years of regulatory experience. The Report rests on the assumption that stablecoins are unregulated. This opinion appears widely shared in Washington DC, and has been expressed by Federal Reserve Chairman Powell, Treasury Secretary Yellen, and SEC Chair Gensler. In commenting on the Report the Acting Comptroller of the OCC, Michael Hsu, describes stablecoins as an “unregulated means to engaging in speculative asset trading, lending, and borrowing,” concluding that these products “need federal prudential supervision to grow and evolve safely.”
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