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The U.S. Senate Banking Committee has sent letters to several stablecoin issuers to inquire about their operational features.
Fast facts
- In a Monday tweet, Ron Hammond, director of government relations at the Blockchain Association, said the stablecoin issuers include Coinbase, Gemini, Circle, Paxos, TrustToken, Centre, Binance U.S. and Tether. “This is likely a sign of an upcoming hearing,” he tweeted.
- In the letters, the committee said stablecoins pose investor protection risks and raise several market integrity concerns, as documented in the recent report by the President’s Working Group on Financial Markets.
- The committee went on to say that even though stablecoins are typically “minted” in exchange for U.S. dollars or other conventional currency, “the purchase of stablecoins through a trading platform may not provide customers with the same rights and entitlements as a direct purchase from an issuer.”
- Subsequently, the committee requested the stablecoin issuers to offer specific information including basic purchases, minting process, limitations, as well as issuance and redemption data. The committee also asked them to “summarize any internal reviews or studies [the] company has conducted about how specific levels of redemptions would affect [the stablecoin], including its convertibility into U.S. dollars, or would affect the financial position of [the] company.”
- The stablecoin companies are requested to respond by Dec. 3.