[Bitcoin Now] Hovering Around 72 Million Won... US Administration Says "Stablecoins Should Be Regulated Like Banks"

Stablecoin Market Size Reaches Approximately 149 Trillion Won

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Gong Byung-sun] While the leading cryptocurrency Bitcoin remains in the 72 million KRW range, the U.S. Joe Biden administration has stated that stablecoins, which are pegged to fiat currencies such as the dollar, should be regulated like banks.

According to the domestic cryptocurrency exchange Upbit, as of 2:46 PM on the 2nd, Bitcoin recorded 72.87 million KRW, up 0.65% compared to the previous day. It slightly rose to 73.3 million KRW at 10:52 AM that day but showed little fluctuation afterward.

The Biden administration in the U.S. expressed its intention to regulate stablecoins. On the 1st (local time), according to the U.S. economic media Bloomberg, the President’s Financial Markets Working Group released a report outlining the influence of stablecoins on financial markets and possible alternatives.

The report suggested that legislative action by Congress is necessary to impose bank-like regulations on stablecoins. It pointed out that supervision is needed given that the stablecoin market size reaches $127 billion (approximately 149 trillion KRW). According to the report, the market capitalization of stablecoins has increased by 500% over the past 12 months.

Furthermore, the U.S. Treasury Department, the Federal Reserve (Fed), and other regulatory agencies were also recommended to provide continuous oversight of the stablecoin market and establish capital standards equivalent to those for banks. Stablecoins should receive deposit protection from the Federal Deposit Insurance Corporation (FDIC) while complying with capital and liquidity regulations and being under the Fed’s supervision. It was also interpreted that the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have the authority to regulate stablecoins.

The Biden administration has expressed its intention to regulate stablecoins for some time. On the 1st of last month, Fed Chair Jerome Powell said at the House Financial Services Committee, “We do not intend to regulate the cryptocurrency market like China,” but added, “The stablecoin market needs regulation.” SEC Chair Gary Gensler also mentioned the possibility of approving Bitcoin futures exchange-traded funds (ETFs) but emphasized that stablecoins must comply with securities laws.