USDC’s ‘Black Swan’ Depegging Could Have Been Avoided With Proper Regulatory Framework

In November 2021, the President’s Working Group on Financial Markets (PWG) produced a comprehensive report outlining a regulatory framework for stablecoins. The report, led by the U.S. Treasury Department and drafted while I served as Treasury’s senior spokesperson, included signatories including the U.S. Securities and Exchange Commission (SEC), Federal Deposit Insurance Corporation (FDIC), the Commodity Futures Trade Commission (CFTC), the Federal Reserve and the Office of the Comptroller of the Currency (OCC). The signatories recommended bank-like regulation of stablecoins to prevent runs, federal oversight of custodial wallet providers and other measures, like 1:1 backing of stablecoins and prohibitions on commingling customer funds.