OCC chief says stablecoins need a common standard

The acting head of the Office of the Comptroller of the Currency asserted that stablecoins should be given a common standard similar to how some web standards of practice were established in the early days of the internet.

Stablecoins reviewed

The state of stablecoins in the cryptocurrency markets has been criticized by a major regulator in the United States.

Michael Hsu, the head of the Office of the Comptroller of the Currency, an independent office of the US Treasury Department responsible for regulating and supervising banks, said stablecoins must become interoperable with each other. He pointed to the potential benefit that could arise if companies that issue stablecoins put forth and adhere to a technical standard.

Speaking in the nation’s capital at the symposium on Artificial Intelligence and the Economy: Charting a Path for Accountable and Inclusive AI, OCC Acting Chief Hsu said:

“To ensure that stablecoins are open and inclusive, I believe that a normative initiative similar to that undertaken by [the Internet Engineering Task Force] and [World Wide Web Consortium] needs to be established, with representatives from not only crypto/Web3 companies, but also academics and government.

Hsu also noted the OCC’s willingness to work with other government agencies to help stablecoin companies develop a single technical standard such as those practiced in the internet’s infancy. The OCC could tap into the National Institute of Standards and Technology, for example, to facilitate the adoption of a shared standard for stablecoins, through which they could be interoperable.

Stablecoins are meant to provide a more stable asset through which to trade and store value via their peg to other assets, such as dollars. There are several on the market, ranging from those issued by centralized companies, such as Tether’s USDT and Circle’s USDC, to decentralized (or algorithmic) stablecoins like MakerDAO’s DAI or Terra’s UST.