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A new bill presented Wednesday in the US Congress could enforce general regulation on all stablecoins. If approved, any services provided in connection with these types of cryptocurrencies would become illegal without first receiving approval from multiple government bodies:
“It will be illegal for any person to issue a stablecoin or stablecoin-related product, provide any stablecoin-related service, or otherwise engage in any stablecoin-related business, including business involving stablecoins issued by other people, without obtaining the written approval in advance, and on an ongoing basis, by the appropriate federal banking agency, the Corporation and the Board of Governors of the Federal Reserve System. “
Dubbed “The Stable Act”, the bill aims to “protect consumers from the risks posed by emerging digital payment tools, such as Facebook’s Libra and other Stablecoins.” However, just a month after the end of the 116th Congress, the bill faces a tough battle to get it approved in time.
Assistant Professor at Willamette Law, Rohan Gray, explained on Twitter that while the bill is primarily aimed at private stable tokens issued by large tech companies, it has been worded to include a “wide range of monetary assets.” Gray added that the bill seeks to “prevent the kind of systematic” shadow banking “risks that led to the 2007-2008 global financial crisis.”
Democratic Party MP Rashida Tlaib, the bill’s main promoter, said the Stable Act is designed to protect people of color and other minority groups who do not have access to regulated financial services.
Preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that large traditional banks have is critically important. That is why I am proud to present the #STABLEAct with @RepChuyGarcia is @RepStephenLynch. https://t.co/yorQPo6wz4
– Congressman Rashida Tlaib (@RepRashida) 2 December 2020
The bill was met with strong disapproval from the crypto community. Meltem Demirors, CoinShares chief strategy officer he answered to Tlaib tweets, stating that “cryptocurrencies lower the cost of service to populations that have historically been excluded from the banking sector”.
He added that by introducing the law, costs and compliance would increase, subsequently cutting off access to the very people Tlaib hopes to protect.
In an eight-post thread on Twitter, Circle CEO and co-founder Jeremy Allaire said the act “would represent a huge step backwards for digital currency innovation in the United States, limiting both the industry’s accelerated progress. blockchain and fintech “.
Wyoming House Representative Tyler Lindholm you think that the act goes against the fundamental ethics of decentralization of the crypto sector:
“Centralization of power for a decentralized world. No thanks. This industry has been light years more successful in bringing financial freedom to non-banks and this has been done without cronyism as suggested in this bill. “
Shapeshift CEO Erik Voorhees shared his opinion that the bill is doomed to fail:
“Don’t we force cryptocurrencies to act like banks, perhaps? (And indeed, it cannot and will not.) “
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