A group of US regulators have said legislation is “urgently needed” on dollar-backed stablecoins at the heart of the $ 2 billion cryptocurrency market, arguing that digital token operators should essentially be treated like banks.

In a report, the president’s financial markets task force, made up of the secretary of the treasury and the heads of all major U.S. financial regulators, said stablecoin issuers should become “insured depositories”, at the time. same as banks that offer savings accounts for customers.

The proposal mirrors the Stable Act, a legislative proposal presented to the U.S. Congress last December that would require stablecoin operators to obtain full banking licenses.

Such a move would result in a drastic increase in oversight of stablecoin issuers, who have so far worked on the fringes of the financial system, subjecting the $ 130 billion sector to strict regulation in exchange for access to cash. emergency regulators in times of stress. Customer deposits at insured financial institutions are also guaranteed by the US government up to a certain dollar amount.

“The rapid growth of stable coins increases the urgency of this work,” the report said. “Failure to act risks the growth of stable payment coins without adequate protection for users, the financial system and the economy in general.”

Other proposals include increased federal oversight of wallet providers – groups that offer products that allow users to keep their crypto tokens – and require stablecoin issuers to limit their affiliation with commercial entities.

A senior administration official said the group was ready to take direct action if Congress did not act urgently. This could include seeking a designation by the Financial Stability Supervisory Board of certain stablecoin activities, which would allow the appropriate agency to establish related risk management standards.

Currently, stablecoins are mainly used to buy and sell more volatile cryptocurrencies such as bitcoin, although some operators want to increase adoption as a tool for fast and cheap global transfers.

The president’s task force has previously described stablecoins as a potential threat to financial stability and even national security. Various regulators around the world have expressed concern about their potential illicit use, weak oversight, and cases of poor transparency on tokens designed to be backed by hard currency assets, mostly dollars.

A senior administration official said the group had rejected suggestions that stablecoins should be treated differently from banks based on the use of distributed ledger technology. Cryptocurrency exchange Coinbase, which jointly manages the $ 33 billion USD Coin stablecoin with payment firm Circle, suggested a new regulator for cryptocurrencies last month.

Some crypto groups wish to operate within the confines of traditional financial regulation, but others are adept at circumventing those rules by founding companies overseas.

Regulators around the world have increasingly sought to control stablecoins as the number of coins in circulation has skyrocketed. In the UK, the Bank of England warned in June that stablecoins face “” tough questions. “

Other organizations are pursuing alternative approaches to stablecoins, which has caused the Financial Stability Board to worry about regulatory arbitrage. A report from international regulators published in early October suggested regulating stablecoins in accordance with payment systems and clearing houses.