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President’s Working Group on Financial Markets Issues Report on Stablecoins | Dechert LLP

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The President’s Working Group on Financial Markets (PWG),1 joined by the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency (OCC), released a Report on Stablecoins (Report) on November 1, 2021. The Report: provides a detailed description of stablecoins; identifies potential risks and regulatory gaps; and sets forth recommendations for legislation and interim action to address those gaps.

Stablecoins

The Report defines “stablecoins” as “digital assets that are designed to maintain a stable value relative to a national currency or other reference assets.”2 Although stablecoins have the potential to support faster and more efficient means of payment, they present a number of risks and concerns, which are described later in this OnPoint.

According to the Report, stablecoins are intended primarily to facilitate trading, lending or borrowing of other digital assets, often for a speculative or an…

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