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Stablecoins Face Crackdown as U.S. Discusses Risk Council Review

  • Treasury, other agencies consider launching FSOC examination
  • Tokens’ fast growth has triggered anxieties among regulators
Mystery Shrouds Tether And Its Links To Biggest Bitcoin Exchange
Photographer: Andrew Harrer/Bloomberg

U.S. officials are discussing launching a formal review into whether Tether and other stablecoins threaten financial stability, scrutiny that could lead to dramatically ramped-up oversight for a fast-growing corner of the crypto market.

After weeks of deliberations, the Treasury Department and other federal agencies are nearing a decision on whether to launch an examination by the Financial Stability Oversight Council, said three people familiar with the matter who asked not to be named in commenting on closed-door discussions. FSOC has the power to deem companies or activities a systemic threat to the financial system -- a label that typically sets off tough rules and aggressive monitoring by regulators.