On November 1, 2021, the President’s Working Group on Financial Markets (PWG), along with the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) issued a Report on Stablecoins (the Report). Stablecoins “are digital assets that are designed to maintain a stable value relative to a national currency or other reference assets.” The Report recommends that Congress act promptly to enact legislation addressing stablecoins and signals the Biden Administration’s focus on this issue and looming enforcement from governing agencies such as the Department of Justice (DOJ), Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).
The Report provides an overview of stablecoins and decentralized finance (DeFi) platforms more generally; risks and regulatory gaps; and the group’s recommendation. In drafting the Report, the Agencies held discussions with key industry stakeholders, including Coinbase, Kraken, and Stripe. While the Report signals that one day we may see clarity on relevant guidelines related to stablecoins, the Report itself offers little clarity or specific guidance to stakeholders today.