ICBA concluded its new series of blog posts on the collapse of the TerraUSD stablecoin with a post focusing on its impact on community banks and the regulatory debate.
Direct Impact: The final post in the three-part series notes that the market instability is fueling the policymaker push for a regulatory structure to address crypto’s risks. Previous posts provide a community bank primer on the TerraUSD collapse and examine its impact on the financial markets.
Regulatory Updates: Meanwhile, the debate over crypto regulation continued after last week’s introduction of legislation by Sens. Kirsten Gillibrand (D-N.Y.) and Cynthia Lummis (R-Wyo.) to entrust most digital asset oversight authority to the Commodity Futures Trading Commission, rather than the Securities and Exchange Commission.
Sheila Bair Op-ed: In a new op-ed, former FDIC Chairman Sheila Bair said the SEC should take a stronger role in regulating stablecoins, by using its model for overseeing government money market mutual funds and spurring Congress to establish a regulatory framework.
Treasury Remarks: Separately, Deputy Treasury Secretary Wally Adeyemo said his department is focusing its crypto efforts on:
Ensuring the sector’s compliance with the Travel Rule, which requires the collection and transmission of information about who is sending and receiving funds.
Ensuring unhosted wallets—in which users hold a cryptocurrency balance outside of a third-party exchange—do not facilitate illicit payments.
More: Additional information on cryptocurrencies and central bank digital currency is available on the ICBA website.