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This letter responds to the U.S. Treasury Department’s request for public comments on President Biden’s Executive Order No. 14067, “Ensuring Responsible Development of Digital Assets” (Mar. 9, 2022). This letter contends that (1) digital stablecoins currently pose significant risks to U.S. financial markets and investors, (2) stablecoins will create great dangers for our financial system, economy, and society if they become a widely-accepted form of payment for consumer and commercial transactions, and (3) allowing Big Tech firms and other commercial enterprises to issue and distribute stablecoins would seriously undermine our nation’s longstanding policy of separating banking and commerce.

In view of the foregoing hazards, Congress and federal agencies should designate stablecoins as deposits and require all issuers and distributors of stablecoins to be chartered as FDIC-insured banks. Congress and federal agencies should also reject proposals that would (i) allow uninsured banks to issue or distribute stablecoins, or (ii) regulate stablecoin providers in the same manner as money market funds, or (iii) provide pass-through federal deposit insurance coverage to customers of nonbank stablecoin providers.

This comment letter is also available at DO-2022-0014-0203.

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