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U.S. Treasury, financial industry discuss cryptocurrency 'stablecoins'

The U.S. Treasury Department met with a number of industry participants this week to quiz them about the risks and benefits posed by stablecoins -- a rapidly growing type of cryptocurrencies, the value of which is pegged to traditional currencies, according to three people with direct knowledge of the meetings.

Washington policymakers are alarmed at the rapidly expanding cryptocurrency market which exceeded a record $2 trillion in April. As of Friday, the market cap of stablecoins stood at roughly $125 billion, according to industry data site CoinMarketCap. It is unclear which financial regulations apply to these relatively new products.

U.S. financial regulators are working to understand the risks and opportunities posed by cryptocurrencies to the traditional U.S. financial system and plan to issue a number of reports on the subject in coming months, they have said.

Reference: Reuters