Acting Comptroller Discusses Architecture Of Stablecoins

On April 8, the acting comptroller of the currency, Michael J. Hsu, discussed many aspects of stablecoins (we previously discussed the President's Working Group report on stablecoins and Hsu's comments here). In his speech at the Georgetown University Law Center, Hsu remarked that stablecoins are a "hot topic" among policymakers and posed three considerations that speak to the architecture of stablecoins.

• Stability. Hsu asked whether there should be a requirement for all stablecoin issuers to comply with a fixed set of safety and soundness-like requirements (as is the case with banks), or to let them pick from a wider set of licensing options, each with distinct risk-reward tradeoffs. Hsu generalized that the wider the variability across stablecoins, the higher the risk it would be to hold the stablecoin.