US regulators weighing new policy for banks to give crypto service, says FDIC chair

The chairman of FDIC stated that they are working with the regulators of the United States to figure out the perfect policy for the banks to provide crypto-based services. 

In speaking with the Money20/20 Fintech Conference on Monday, Jelena McWilliams, the chairperson of the Federal Deposit Insurance Corporation (FDIC) said that the FDIC agency is working on the development of the policies with the policymakers of US regulators so that they can allow US banks to give crypto service to their clients. 

McWilliams asserted the potential benefits of the StableCoins use. According to McWilliams, private StableCoins are a much better option over fiat currency in terms of high speed & scalability based transactions. But here we should not forget the associated risk that may occur.

According to McWilliams, if people will shift towards the StableCoins adoption rapidly and if a situation will occur in future where StableCoins will dominate over Federal Currency then surely there will be a big risky situation for the traditional ecosystem-based currencies. In that situation, high financial instability may occur. 

 Further, McWilliams explained that there are ways to adopt StableCoins with the best policies to overcome the risks associated with it. Chairperson added 

“To realize the potential benefits stablecoins have to offer while accounting for potential risks, stablecoins should be subject to well-tailored government oversight”

Further, McWilliams added that there should be high liquidity for 1:1 StableCoins assets conversion. And that situation will give exactly full pegged fiat currency based StableCoins. 

Here the FDIC chairperson indirectly suggested to make all the StableCoins 100% fully pegged with the US dollar by introducing a better policy on the private StableCoins issuer companies. 

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