cryptos’ popularity deters regulators from restricting them: Market Wrap

Bitcoin, the leading international cryptocurrency, traded lower on Thursday, falling by 1.04 percent to $53,798.80.

Ether, the second most traded cryptocurrency, traded at $3,567.50, down by 0.81 percent, according to data from Coindesk.

The Federal Deposit Insurance Corporation (FDIC), a major US banking regulator, is studying whether certain stablecoins qualify for its coverage, according to people familiar with the agency’s thinking.

The corporation is trying to analyze the so-called pass-through FDIC insurance for the reserves that stablecoin issuers hold in banks.

This coverage will also insure token holders against losses of up to $250,000 if the bank holding the collateral fails.

“This is all part of a process by which they are trying to bring stablecoins into the banking system in a responsible manner,” one insider said, adding: “It depends on what’s backing the stablecoins.

“If it’s backed by reserves at the Federal Reserve for cash then I think you just make the argument that it’s a deposit. If it’s backed by treasuries, I think you’ll have a hard time treating it as a deposit.”

The Wall Street Journal also confirmed to CoinDesk that the Biden administration will subject stablecoin issuers to bank-like regulations.

No plan to ban crypto

Gary Gensler, the head of the Securities and Exchange Commission (SEC), stated that it had no plan to ban cryptocurrencies as China did, and indicated that it was up to Congress to make such a decision.

His comments echoed earlier comments made by Federal Reserve Chairman Jerome Powell.

Adoption

The American fashion and retail brand PacSun has announced the company is now accepting cryptocurrencies via Bitpay’s payment services.

The company said it has a young, highly tech-oriented audience and has seen a growing interest in cryptocurrencies.

The company has partnered with the crypto payments firm Bitpay and disclosed it will accept 11 different crypto assets, including Bitcoin, Bitcoin Cash, Ethere, Wrapped Bitcoin, Dogecoin and Litecoin. Five different stablecoins pegged to the US dollar will also be accepted by Pacsun.

“With digital sales doubling since last year, we understand the continued importance of creating an exceptional online shopping experience for our customers,” Brie Olson, CEO of Pacsun said in a statement