The FDIC, the Federal Deposit Insurance Corporation, is taking a closer look at cryptocurrency, especially stablecoins. FDIC chairman believes that stablecoins are very important and they could revolutionize banking. Chairman thinks that stablecoin issuers should be subject to regulatory oversight to get the full potential of this currency.
Martin Gruenberg, the FDIC chairman, said that the FDIC, with other Federal banking agencies, is expected to issue industry-wide guidelines for financial institutions dealing in crypto, which could affect stablecoins positively. FDIC is a consumer protection agency, and its work is to ensure users’ deposits and oversees financial institutions for safety. They do so to protect users in the event of bank failures.
On the 20th of October, at a Brookings Institution event, Martin said that the FDIC has been investigating the risks of cryptocurrencies since April 2022, which shows how much they are interested in cryptocurrencies and digital assets. Martin also praised stablecoins as he said that stablecoins’ ability to offer cost-effective, real-time, around-the-clock service is laudable.
According to Martin, stablecoins are very important and could fundamentally change the banking industry. As per this saying, he thinks because of these features, it should be subjected to a legal framework and regulation. Martin said that all payment stablecoin issuers should be subject to prudential regulation and oversight. He said that just like banks, whether Federal or state-chartered.
When the FDIC, with other Federal banking agencies, gains better knowledge of the crypto industry, it will start offering supervisory feedback to financial institutions. Martin said that as the FDIC and the other Federal banking agencies develop a better collective understanding of the risks associated with these activities, they expect to provide broader industry guidance on an interagency basis.