Yahoo Finance reporter Jen Schonberger discusses news that the White House is weighing the idea of stablecoin regulation that would extend beyond banks and the EU reaching a landmark deal on crypto regulation.
BRAD SMITH: Welcome back, everyone. As pressure mounts to roll out regulation on the crypto market, the Biden administration is weighing stablecoin regulation outside of traditional banks. Joining us now with the breakdown of what this could look like, we've got Yahoo Finance's Jennifer Schonberger. Jennifer.
JENNIFER SCHONBERGER: Good morning. That's right. The president's working group on financial markets is open to regulating stablecoin issuers through methods other than as banks, according to a senior administration official. The [? DWG ?] initially recommended last fall that only insured depository institutions, which are subject to more rigorous oversight and regulation, right-- banks-- should be allowed to issue stablecoins. So this is the first time the administration has acknowledged a model outside of traditional banks that could suffice. One of those, a remote subsidiary option.
The PWG, a group composed of the heads of Treasury, the Federal Reserve, the Securities and Exchange Commission, among other financial regulatory bodies, met in a closed door meeting Thursday morning. The group discussed oversight of stablecoins following the run on Terra USD, which caused shockwaves in crypto markets in early May, touching off what some have called a crypto winter.
Now, this meeting also comes as negotiations over legislation to regulate stablecoins intensify on Capitol Hill. There's a new legislative effort that's emerging in the House Financial Services Committee by Chairwoman Maxine Waters and ranking member Patrick McHenry to regulate stablecoins. According to an administration official, there is a concerted effort to get stablecoin legislation done this year. Guys.
JULIE HYMAN: In the meantime, Jen, over in the European Union, while we're sort of, like, muddling around in terms of trying to figure out crypto regulation writ large, they seem to be making more progress.
JENNIFER SCHONBERGER: Yeah, Julie, the EU seems to be leading the crypto regulatory charge overnight, securing an agreement in what could be the first major regulatory framework for regulating crypto in the world. The EU securing rules that would protect consumers against hacks and scams, regulate exchanges. It would also require stablecoin issuers to have a certain amount of capital on hand to make sure if there are massive withdrawals, they would be able to meet that.
So the EU really a first mover in this space, just as the US, as you said, sort of muddling along here. There are legislative proposals underway in Congress. And agencies here in Washington, DC are studying how to regulate cryptocurrencies at the direction of President Biden's executive order from earlier this year. But the reality is that we're probably not going to see anything passed till 2023, maybe even 2024 at this point.
JULIE HYMAN: Well, unless we take a cue, I guess, from the Europeans. Thanks so much, Jen. Appreciate it.