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In the letter
- Three members of Congress proposed a bill to regulate stablecoins.
- The STABLE Act would set issuers of stablecoins to some of the same standards as banks.
- Some cryptocurrency advocates think it will stifle innovation and further marginalize sub-bank communities.
These are the dying days of the 116th Congress, which will end on January 3, 2021. Any bills that have not become law by then will die with it.
But that’s still plenty of time to kick the wasp’s nest that is Crypto Twitter!
Today, Congresswoman Rashida Tlaib announced the Stablecoin Tethering and Bank Licensing Enforcement Act (STABLE), which is co-sponsored by Representative Jesús “Chuy” García and Representative Stephen Lynch.
The bill, which has almost no chance of becoming law, angered cryptocurrency enthusiasts Wednesday night.
This is because the bill, which targets stablecoin companies like Tether and SC Curious Facebook directly, would require any company that issues a stablecoin to have a bank card and be approved by the Federal Reserve and FDIC – no small company. of digital assets.
Stablecoins are a type of cryptocurrency whose value is pegged to another asset, often the US dollar.
The bill is apparently written to protect low and moderate income consumers who have found themselves excluded from traditional banking. Tlaib and others are insisting on the need for regulation that prevents cryptocurrency companies from adopting the bad habits of big banks and further marginalizing vulnerable populations.
CoinShares Chief Strategy Officer Meltem Demirors said the bill would do the opposite of what it intends:
“Cryptocurrencies LOWER the cost of service to populations that have historically been excluded from the banking sector,” he wrote. “Rising costs and compliance obligations are forcing companies to cut off access to unprofitable customers.”
Jeremy Allaire, CEO of Circle, which issues the USDC stablecoin, showed innovation that comes from outside the traditional banking system: “The STABLE Act would represent a huge step backwards for digital currency innovation in the United States, limiting accelerated progress. of both blockchain and fintech industry “.
Professor Rohan Gray, assistant professor at Willamette University College of Law, who contributed to the bill, argued that innovators need guardrails. “Oh, the purpose of the regulations is to give the industry what they want?” he wrote. “Some people want to act as if ignorance of banking history is a position of principle.”
Meanwhile, XRP Army cadets think it’s not that bad, especially the part that requires stablecoins to keep $ 1 in reserve for every stablecoin issued.
With the US likely headed for another two years of divided rule, this bill may not be discussed much beyond this week. Instead, cryptocurrency users should expect the government’s version of stability – legislative and regulatory blockade – with or without the coins.
