Congressmen speak out against Tlaib’s anti-stablecoin law

Wednesday night the congressman Rashida Tlaib tabled a bill in the US House of Representatives to encourage traders of stablecoin pegged to fiat currencies to adhere to the same rules and registration requirements that are expected from banks.

The legislation under the name “Law for the Use of Banking Licenses and Stablecoin Anchoring (STABLE)”, establishes a new and extremely broad definition of “stable coin” or stable currency. It also imposes a number of restrictions prohibiting the issuance of stablecoins for companies that are not “an insured custodian that is a member of the Federal Reserve System.”

One of the provisions of the draft law would be more aggressive:

“It is illegal for any person to issue a stablecoin or any product related to a stablecoin, provide services related to a stablecoin, or engage in any commercial activity related to a stablecoin, including activities issued by stable coins or others”.

The regulations sparked a remarkably unified outcry from the crypto community, including Tlaib’s colleagues on the Financial Services Committee.

“The effects are just terrible,” Rep. Warren Davidson told Cointelegraph. “One of the worst effects is the people Tlaib tries to protect who are both unbanked and unbanked.”

Davidson said the bill’s requirements would ensure that only major banks in the US can use stablecoin technology. “I don’t know their motives, but I know that JPMcoin will be banned and everything else will be killed.”

In a statement, Congressman Tom Emmer similarly introduced the benefits stablecoins could have for low- and middle-income users:

“Those of us who are helping develop these new innovations in the US have worked to learn this technology and understand what can have a tremendous positive impact on low- to middle-income Americans and people around the world.”

Emmer and Davidson are Republicans and members of the Blockchain Caucus. All three representatives who support the bill are Democrats. Cointelegraph reached out to Tlaib staff as well as the team of co-sponsor and fintech task force chairman Stephen Lynch, but neither was willing to comment on the minutes.

Regarding the specific threats posed by the bill, according to Peter Van Valkenburgh of the nonprofit advocacy group Coin Center, it would threaten the node operators of decentralized networks like Ethereum, which operate many stablecoins.

Rohan Gray, the author of the bill, disagreed. Gray, an assistant professor at Willamette University, tweeted in response to Nick Szabo’s criticism:

No, the little folks are supposed to stop spending stablecoins too, but the idea that it will be necessary to put every person running a node together to end the systemic risk created by capitalized stablecoins is fantasy and so on pretend it’s not scare tactics.

– Rohan Gray (@rohangrey) 3rd December 2020

No, small ones are supposed to stop issuing stablecoins as well, but the idea that it will be necessary to bring everyone running a node together to end the systemic risk posed by stablecoins written in large fonts is a fantasy and an excuse. that it doesn’t create fear.

At the same time, Gray seems quite ready to hold node operators responsible for the sins of their networks:

Who does the knots? There is no network without responsible parties.

– Rohan Gray (@rohangrey) 3rd December 2020

Who runs the nodes? There is no network without a responsible person.

None of this means the bill is going anywhere. “The Tlaib bill actually has to go through a committee and the Senate and get the president to sign it,” Davidson said. “I hope the process can stop it.”

The congress will end soon. A bill to regulate stablecoins won’t be high on anyone’s priority list when December turns into America’s National Risky Politics Month.

Even in a new congress, It’s hard to imagine this calculation moving forward, and certainly not without major changes. It specifically refers to Diem soon to be posted on Facebook, formerly known as Libra, a stablecoin that was a special lightning rod for token legislation that goes nowhere.

Much of what this symbolic legislation is supposed to do sets the tone for discussion on new topics. The biggest impact of the STABLE Act may be the turmoil it caused.