Stablecoins are becoming a fixture in today’s financial landscape. With the Senate’s recent passage of the GENIUS Act, the opportunities and risks of stablecoins will continue to be examined, as the legislation begins to face scrutiny in the House.
A BWC report from February on Digital Finance investigates the opportunities and risks that stablecoins pose. Written by Corey Then, Caroline Hill, and David Anderson, it identifies key risks and outlines three steps for mitigating them, which should be incorporated into any regulatory framework.
Ultimately, the report recommends that any regulation include three essential elements: deep connections to existing banking and payments systems, a strong reserve ratio, and transparency for any and all reserve holdings.