Sherrod Brown, chairman of the Senate Banking Committee, is probing some of the biggest stablecoin issuers and exchanges for more information about the risks that digital tokens pose to investors and consumers.
In letters to executives at Tether, Coinbase Global Inc., Binance.US and five other companies, Brown asked for more details about the size of the market for digital coins, how tokens are converted into U.S. dollars and how consumers exchange cryptocurrencies, among other questions.
“The complex terms and conditions applicable to digital assets and stablecoins, as well as the need for reliable and resilient underlying networks, can make it difficult for investors and consumers to fully understand the details of how those assets function and their potential risks,” Brown wrote, asking for a response by Dec. 3.
The senator also sent letters to issuers including Gemini. Stablecoins are a crucial part of the crypto ecosystem as they are often used to bet on other coins.
Brown said he wrote to stablecoin executives after a group of financial regulators issued a report that highlighted their concerns about the burgeoning industry. Earlier this month, the President’s Working Group on Financial Markets said tokens could threaten the U.S. economy and that more rules and oversight is needed in the industry.
(Updates with Tether letters starting in second paragraph.)
©2021 Bloomberg L.P.