The report said “stablecoins could support faster, more efficient, and more inclusive payments options.”
The White House has been working with economic advisors and regulators for months on the digital assets.
The Biden administration released a highly anticipated report Monday asking Congress to create regulations for stablecoins, the Crypto Insider reported.
Stablecoins, which are cryptocurrencies tied to government-issued money like the US dollar, could become widely adopted, the report said, adding that a regulatory framework would increase confidence in using the digital assets for payment purposes.
“If well-designed and appropriately regulated, stablecoins could support faster, more efficient, and more inclusive payments options,” according to the report from the President’s Working Group on Financial Markets.
But rules around stablecoins are “urgently needed,” and Congress should impose certain laws like only allowing banks to issue the coins, it added.
“Failure to act risks growth of payment stablecoins without adequate protection for users, the financial system, and the broader economy,” the report warned.
Without stablecoin legislation from Congress, the report also recommended that the Financial Stability Oversight Council consider designating some activities as systemically important. Eventually, that could lead the Federal Reserve to crafting stablecoin rules.
Biden has long been working with top economic advisors and senior regulators such as Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell to propose rules regarding stablecoins. A separate report on digital currencies from the Fed is also expected soon.
Regulators have been grappling with how to manage digital assets in recent months as attention around them has grown. Stablecoins, though they account for only small piece of the more than $2 trillion digital-asset market, have caught the attention of regulators because of their rapid growth.
Well-known coins include ones from Tether, Circle, and Binance, whose tokens’ combined valuation has jumped to $110 billion from $11 billion last year, Crypto Insider reported previously.