EU, US financial regulators talk cooperation on stablecoins and digital assets at virtual summit

An array of regulators from the United States and the European Union met to discuss financial innovations, including green finance and the ever-pressing topic of stablecoins.

In a March 29 announcement, the U.S. Treasury said that a virtual forum last week hosted all of the heavy hitters of the EU and U.S. financial apparatus, including their respective central banks, securities regulators and banking authorities.

The agenda for the meetings skewed heavily towards the latest technological developments in finance. The Biden administration's interest in centering climate change as a financial risk played heavily in the Treasury's description of the event. The impact of the COVID-19 pandemic on finance also loomed large. 

While climate change and the pandemic have been critical areas for global cooperation for a long time, the agencies also seem to have elevated digital asset regulation to a global priority. The Treasury wrote: "Participants also exchanged views on recent developments and regulatory proposals involving new forms of digital payments, including crypto-assets, so-called stablecoins, and central bank digital currencies."

Interest in streamlining payments using blockchain has picked up in the international financial world in recent years. But the technology's use in criminal circles continues to color the conversation around regulation in the U.S. This was on display earlier this year when Treasury Secretary Janet Yellen went on the record with concerns that Bitcoin is used "mainly for illicit finance" during her nomination hearings.

Since Yellen's confirmation, the Treasury has also moved forward with a Mnuchin-era proposal to require crypto exchanges to have to identify information on external wallets they transact with above certain thresholds. Last week's forum similarly included talk of new anti-money laundering proposals at the Financial Action Task Force, the G7's illicit finance watchdog that is reportedly considering guidance on self-hosted wallets patterned on the U.S. Treasury's. 

The Treasury had not responded to The Block's request for comment as of publication time.