Congress should subject payment stablecoins to a regulatory framework that limits activity to insured depository institutions and their subsidiaries, CUNA wrote to the House Financial Services Subcommittee on Digital Assets, Financial Technology, and Inclusion Tuesday. The committee will conduct a hearing on stablecoin Wednesday, and CUNA submitted its letter for the record of the hearing.
“Credit unions are highly regulated in their operation and credit union members are protected by a plethora of consumer protection laws,” the letter reads. “The digital assets sector currently operates in a largely decentralized environment outside of the traditional financial safeguards and generally without financial intermediaries where the role of stabilizer and protector generally rest.”
CUNA adds that the fundamental innovation of cryptocurrencies and other digital assets is the lack of financial intermediary, which also brings concerns.
“The Presidential Working Group on Financial Markets (PWG) recognized these risks and rightly directed Congress to promptly enact legislation to subject payment stablecoins to a federal prudential regulatory framework,” the letter reads “This legislation should direct that insured depository institutions, that are subject to stringent regulations and oversight, and their subsidiaries serve as the sole issuers and conduit for payment stablecoins to ensure the safety, security, and continuity of the market.
“Moreover, there must be parity amongst all depository institution charters—both bank and credit union—as approved stablecoin issuers,” it adds.