The planned meeting follows comments this week by Fed Chairman Jerome Powell warning that stablecoins lack needed regulatory oversight.
“They are like money funds, they’re like bank deposits and they’re growing incredibly fast but without appropriate regulation,” Mr. Powell said in answering questions Thursday before the Senate Banking Committee. “And if we’re going to have something that looks just like a money market fund or a bank deposit or a narrow bank and it’s growing really fast, we really ought to have appropriate regulation. And today, we don’t.”
Fed officials, including Boston Fed President Eric Rosengren, have highlighted potential growing risks from stablecoins, including Tether.
In December, the government warned firms behind stablecoins to tighten protections against money laundering. The Treasury and other agencies said at the time they should be used in a way that “effectively manages risk and maintains the stability of the U.S. domestic and international financial and monetary systems.”
There’s also the question of whether Congress should step in and write new laws that would give regulators more authority to regulate cryptocurrencies. One bill introduced in Congress last year would require stablecoin issuers to have a banking charter and get approval from the Fed, among other agencies.
The concept of a stablecoin is closely linked to the difficult decision the Fed faces on whether to someday launch a digital currency. Mr. Powell suggested this week that the best-case scenario for a Fed-run digital dollar would involve Congress issuing a legislative directive rather than letting the regulators pick through existing “ambiguous law” to back up any future moves.
The Fed has already been working on a digital-currencies report that Mr. Powell said could be released as soon as September. Among other things, that document will include a discussion on the risks and benefits of stablecoins, he said.
In recent years, the OCC has set itself up as the most aggressive banking agency when it comes to prepping the financial system for the influx of cryptocurrencies. The agency’s former acting head, Brian Brooks, a Trump administration pick, made a series of rapid moves to accelerate digital currencies in U.S. banking. But Mr. Brooks left and took a job running the cryptocurrency exchange Binance.US, and the OCC’s work is expected to slow under Michael J. Hsu, the agency’s current temporary chief.