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Illustration: Sarah Grillo/Axios

The White House on Wednesday released its initial assessment of regulatory considerations for stablecoins, a form of cryptocurrencies designed to have less pricing volatility than do more traditional cryptocurrencies like Bitcoin.

Why it matters: The document covers all U.S. stablecoin arrangements, including Facebook's Libra project, which is slated to launch next month.

  • Stablecoins' lack of pricing volatility is achieved by being pegged to other assets, such as fiat currencies, and means that they are well-positioned to be used for consumer retail, a bet that Facebook is making.

Inside the report: The President's Working Group on Financial Markets, which conducted the assessment, includes the top officials at the U.S. Treasury Department, Federal Reserve, Securities & Exchange Commission and Commodity Futures Trading Commission.

  • It primarily seems to be warning that there will be broad-based regulatory oversight of stablecoins, although it does include some specific guidance like maintaining a 1:1 reserve ratio and "adequate financial resources to absorb losses and meet liquidity needs."
  • It also wants there to be a swift and orderly claims process for stablecoin holders against the issuer, including 1:1 redemption in the underlying fiat currency (net of fees).
  • There is no explicit mention of requiring bank charters, which has been proposed by some in Congress, although it opens the door by suggesting some stablecoins may need "to rely on U.S.-regulated entities as intermediaries."

The bottom line: This is just a first step toward formal regulation, but it tells stablecoin issuers that regulation is coming.

Go deeper

Mike Allen, author of AM
8 mins ago - Politics & Policy

Biden-Harris, Day 1: What mattered most

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Photo illustration: Aïda Amer/Axios. Photos: Mandel Ngan/AFP via Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. Axios takes you inside the collapse of a president with a special series.

Episode 8: The siege. An inside account of the deadly insurrection at the Capitol on Jan. 6 that ultimately failed to block the certification of the Electoral College. And, finally, Trump's concession.

On Jan. 6, White House deputy national security adviser Matt Pottinger entered the West Wing in the mid-afternoon, shortly after his colleagues' phones had lit up with an emergency curfew alert from D.C. Mayor Muriel Bowser.