The Biden administration wants to regulate companies that issue stablecoins like banks, the Wall Street Journal reports.
The White House also will push Congress to create a new type of charter for these crypto companies. The Treasury Department is expected to issue a report on the subject that includes the White House's recommendations in late October, according to the Journal.
Regulators and market analysts are concerned that stablecoins could destabilize the broader markets, since many stablecoins are backed by other assets, such as commercial paper. If investors sought to sell off stablecoins, issuers might have to sell assets to maintain price parity, a situation which could spiral out of control like a run on banks.
Stablecoin issuer Circle has said it plans to seek a charter to become a "full-reserve national commercial bank." It is unclear how the administration's stablecoin regulatory framework would differ from what Circle is seeking.
Dante Disparte, chief strategy officer and head of global policy at Circle, said in a statement the company supports a "full-reserve banking model built on digital currency technology" and will continue to work with regulators.