Stablecoins Need Bank-Level Oversight, Says U.S. banking Lawyer
Randy Guynn, a leading U.S.banking attorney, believes stablecoins should face bank-level regulations. He made this point during a U.S.House Financial Services Committee meeting.
Guynn argues that stablecoins should be as secure as insured bank deposits adn central bank money.to achieve this, he suggests that stablecoin issuers should maintain liquidity reserves and capital buffers similar to banks.
Guynn, who leads the Financial Institutions Group at Davis Polk & Wardwell LLP, views stablecoins as digital private money. He believes they should be regulated like customary financial products. He also notes that private money innovations have historically been part of financial systems.
Though,Guynn warns that without proper oversight,stablecoins could cause financial instability,similar to past banking crises. He emphasizes that while people have historically been free to create private money, stablecoins need clear rules to ensure safety.
The hearing is part of ongoing discussions about the Stablecoin Regulation Act. This bill aims to set guidelines for stablecoin issuers. Guynn, who helped design meta’s Diem stablecoin project, believes well-regulated stablecoins can improve payment efficiency and reduce risks.
His views contribute to the debate on whether stablecoins should be regulated like banks, money market funds, or as a new financial category.
