Former CTFTC chair talks future of stablecoins: We’re not addressing the risks
Former chairman of the Commodity Futures Trading Commission Timothy Massad told CNBC’s Jim Cramer on Monday that the government and the market should not ignore stablecoin in the hopes that it will disappear.
As its name would suggest, a stablecoin is a kind of cryptocurrency token meant to be backed by real assets. For exaple, one stablecoin would be equivalent to one dollar. Massad said these coins could act as a bridge between “the crypto world and the real world.”
“My concern is we’re not addressing the risks,” he continued, adding that he is not. “I think our regulators often take the view that, well it’s better just to try to keep them out of the regulatory perimeter, but I don’t think that really works, and I think, you know, the competition from stable coins could be useful, again, if we address the risks, and they are significant.”
Massad has been publicly advocating for immediate crypto regulations that would protect investors without having to wait years for litigation to conclude or laws to be completely re-written. Along with former Securities and Exchange Commission chair Jay Clayton, Massad penned an op-ed in the Wall Street journal earlier in July arguing that the SEC and the CFTC should jointly form a self-regulatory organization to create basic standards that prevent fraud.
Massad said stablecoins may have the potential to create a faster payment mechanism for the United States, which he said has a system that is slower and more expensive than that of other countries. He added that if the U.S. were to create stablecoin regulations, the rest of the world would likely follow suit, but also said many countries are already creating their own frameworks.
He also said that despite their limited use, stablecoins are already causing banks to re-evaluate their own systems and think about the ways that they might improve.
“I’m sympathetic to a lot of people in government saying, ‘we don’t really, we’re not convinced of the use case here, we don’t really see what the value is in the real world,’ Massad said. “But, you know, sometimes it takes time to really discover that.”
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