Stablecoins Are a Compelling Payment Option, But They Need To Be Regulated, Biden Administration Report Says

Stablecoins, a popular type of digital asset pegged to traditional currencies, could transform the way Americans pay for everything from cell phones and gasoline to haircuts and cups of coffee, according to a long-awaited report released by the Biden administration. From a report: When regulated, stablecoins could 'support faster, more efficient, and more inclusive payments options,' said the President's Working Group on Financial Markets, which includes several top economic advisors to President Joe Biden. 'Moreover,' the report reads, 'the transition to broader use of stablecoins as a means of payment could occur rapidly due to network effects or relationships between stablecoins and existing user bases or platforms.'

Still, Biden's economic advisors said Congress must introduce regulatory oversight and formal market structure as soon as possible to both protect and inform investors, issuers and exchanges. Specifically, the Biden team recommended Congress pass legislation that limits stablecoin issuance to insured banks, a move that would give regulators far greater jurisdiction over the industry. Senior administration officials told CNBC that their report focuses on risks but that the nation's top regulators think stablecoins offer a compelling digital payments option that needs far more oversight from lawmakers.

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