American University Law Professor: Stablecoins need federal regulation to prevent financial risks

Hilary Allen, a law professor at a US university, pointed out that stablecoins pose a potential threat to the banking system and the public, and advocated for federal regulation. She warned that stablecoins could lead to banking instability and ultimately require government emergency assistance. This statement comes as the US Congress increases its efforts to regulate stablecoins, although the chance of a stablecoin bill passing in a presidential election year is small. Marcelo M. Prates, a financial policy and regulatory expert, believes that stablecoins should be subject to appropriate regulation, but emphasizes their potential as electronic currencies to improve financial competitiveness, reduce costs, and promote financial inclusion. He suggests that the US federal government establish three pillars of stablecoin regulation: issuing non-bank licenses, direct access to central bank accounts, and backup asset bankruptcy protection. This proposal aims to ensure that stablecoin issuers can operate in a low-risk and transparent regulatory environment, better serving the payment industry and protecting consumer rights.