Stablecoin owners could reportedly be insured against losses of up to $250,000 if the bank where reserves are held collapses — but there are caveats and complications.
Big changes to the stablecoin market could be on the way in the U.S., according to reports.
A major banking regulator is now exploring whether some stablecoins could be eligible for insurance.
This protection would kick in if a bank where the funds backing up a stablecoin’s value collapsed.
Caveats and Complications
There are a number of caveats and complications related to the measures being explored by the Federal Deposit Insurance Corporation.
Any eligibility for insurance under FDIC would have to be related to the cash held in a financial institution.
Another — potentially thornier — issue relates to the fact that issuers would need to keep track of who owns their stablecoins… and how much they have in their account.
This could prove difficult in a world where stablecoins are constantly moving around on public blockchains including Ethereum.
On the face of it, this could be welcome news for crypto investors — but inevitably, there would be concerns about creeping centralization and privacy.
The U.S. is currently exploring whether stablecoins should be subject to tighter regulations.