The cryptocurrency community was hit earlier this week by news that U.S. House representatives are trying to crack down on stablecoins.
The Bureau of Congress Rashida Tlaib, which is leading this new bill, wrote in a press release announcing this move:
“The COVID-19 pandemic has exposed numerous barriers to access and use of traditional financial institutions, leaving many to look to the financial technology sector to meet the financial services needs of low- and moderate-income consumers (LMI) for any what, from faster direct payments, access to loans and even access to bank accounts. LMI consumer vulnerabilities could be exploited and obscured by bad actors trying to issue stablecoins. “
This “STABLE Act” would require any issuer of a stablecoin to comply directly with banking regulations. This would essentially damage the DeFi space by allowing only KYC-ed individuals to transact with decentralized applications.
In addition, supporters of the act on Twitter, including a digital currency professor / specialist at Stanford, Rohan Gray, basically She said that nodes should be prevented from processing illegal stablecoin transactions:
“You are taking the Ethereum network as a fixed variable and saying that it is impossible for the node validators on it to know which transactions they are verifying. I’m saying running Ethereum itself is a * choice * and if that’s a problem, change the code or run a diff network. “
The crypto space, especially the Ethereum community, is not making fun of it.
The Ethereum and cryptocurrency community retorts the STABLE Act
Scott Lewis, the founder of projects like DeFi Pulse, wrote that a key proponent of this STABLE Act is making some dangerous and incorrect assumptions about Ethereum and cryptocurrencies as a whole.
The attorney, Nathan Tankus, said that Ethereum users are subject to “mediation conducted by the Ethereum Foundation when using the Ethereum network” because no Ethereum users actually manage their nodes.
The main proponent of the STABLE Act believes:
1) all Ethereum users are subject to the * mediation * conducted by the Ethereum Foundation when using the Ethereum network
2) open source Ethereum clients cannot be legally forked
3) The people who run their own nodes are an “industry myth” pic.twitter.com/kLg0FYdsXO
– 🍥tt 🌾 (@scott_lew_is) December 4, 2020
Many in space have returned fire against these claims, pointing to their own kinks and evidence showing that cracking down on stablecoins would actually harm the dispossessed.
CoinCenter, a key advocate for positive and logical crypto regulation in Washington, has received tens of thousands of dollars in donations since the STABLE Act was released.
Stablecoins continue to gain ground
While stablecoins are under fire, they are seeing institutional support.
It turned out that the US government itself was working directly with the USDC broadcaster Circle to distribute subsidies to Venezuelans in need.
Additionally, it was recently revealed that Visa is partnering with Circle to allow businesses to accept USDC payments.
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