Stablecoin Regulatory Situation: Digital Chamber of Commerce Calls for No New Rules; Facebook Novi Pilot Blocked

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2021-10-20 13:25 (UTC+8)

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Diem and Novi, who had finally made a little noise, were bad-mouthed by the regulators.

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Diem and Novi, who had finally made a little noise, were bad-mouthed by the regulators.

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Stablecoins do not need separate regulations, according to the Chamber of Digital Commerce.
US senators called on Facebook to stop rolling out Diem and Novi.

According to ReutersAccording to Reuters

, The Chamber of Digital Commerce, a U.S. crypto advocacy group, said retail-focused, dollar-pegged stablecoins should not face new or purpose-built regulations “just because new technologies are being deployed.”Stablecoin Regulation

Stablecoin Regulation

The Chamber of Digital Commerce’s rhetoric on stablecoins and regulation is at odds with other observers outside the crypto industry.Earlier this week, Fitch Ratings, one of the three major credit rating agencies,。

Issue warning against stablecoins

“Fitch Ratings believes that stablecoins approaching the systemically important scale could play an important role in short-term securities markets such as commercial paper, while introducing new risks to these markets,” the agency said.

Fitch Ratings is not the only observer to warn against such cryptocurrencies. U.S. Treasury Secretary Janet Yellen met with various federal agencies earlier this year to develop a regulatory approach to governing stablecoins. At the time, Yellen stressed the need to "act quickly."

Federal Reserve Chairman Jerome Powell also believes that stablecoins need to be regulated. In his view, they should be regulated similarly to bank deposits and money market funds.

Jon Cunliffe, deputy governor for financial stability at the Bank of England, may also disagree with a premise of the Digital Chamber’s comments that stablecoins are too small an industry to merit dedicated regulation.Earlier this month,Jon Cunliffe on the broader crypto industry

"Of course, $2.3 trillion needs to be seen in the context of the $250 trillion global financial system. But as the financial crisis showed us, you don't have to be a large percentage of the financial industry to cause financial stability problems .”

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US senators call on Facebook to stop rolling out Diem and Novi, Facebook began rolling out small pilots of its Novi digital wallet in the US and Guatemala. People can send and receive Paxos Dollars (USDP) instantly, securely and for free. Marcus expressed the hope that this will demonstrate a new use case for stablecoins as payment instruments. It is reported that Coinbase Custody provides support for Novi and manages private keys through its proprietary and completely isolated cold storage capabilities to ensure the safety of user funds. Marcus also made it clear that Facebook's support for Diem has not changed and intends to launch Novi with Diem once Diem has received regulatory approval and goes live.