As things stand today, e-money businesses and stablecoin issuers are regulated at the state level across the United States. However, the U.S. Treasury Under Secretary Nellie Liang recently shared her view that this should change.
Liang argued that all nonbank payment providers, including money transmitters, e-money firms and stablecoin issuers, should be regulated at the federal level. She argued that state regulations hail from the era of physical cash, that money transmitters wouldn’t hold funds for long back then, and that since times have changed, so should the relevant regulations.
Liang underscored how federal rules could help companies involved in these activities in multiple ways. Right now, they must navigate a patchwork quilt of state regulations and apply for multiple licenses. She called this “burdensome and inefficient,” outlining how federal standards would simplify things.
What would those regulations cover? The whole gamut from financial resources to risk management, supervision and the activities these businesses can engage in. For example, e-money issuers would be restricted to payment-related activities so they don’t begin to resemble banks.
