A new law passed in the United States Congress on Wednesday could enforce general regulation of all stablecoins. If approved, any service provided in relation to this type of cryptocurrency would become illegal without first obtaining approval from multiple government agencies.::
“It is illegal for any person to issue a Stable Coin or any related product, provide any related service, or otherwise participate in any related commercial activity, including Stable Coin activities issued by others without Obtain prior written approval from the relevant federal bank, society, and board of governors of the Federal Reserve System. “
The bill, entitled “The Stable Act,” aims to “protect consumers from the risks posed by new digital payment instruments like the Facebook scales and other stablecoins.”. With only one month left until the end of the 116th Congress, the bill faces an uphill battle to get it passed on time.
Willamette Law Adjunct Professor Rohan Gray, explained on Twitter that Although the bill primarily targets private stablecoins issued by large technology companies, it was designed to encompass a “wide range of monetary activities”.. Gray added that the bill is designed to “prevent the kind of systematic” shadow banking “risk that led to the 2007-2008 global financial crisis.”
Democratic Party Congressman Rashida Tlaib, the main initiator of the law, said so The stable law is designed to protect people of color and other minorities who do not have access to regulated financial services.
It is vital to prevent cryptocurrency providers from repeating crimes against low and middle income residents. So I’m proud to present that #STABLEAct With @RepChuyGarcia Y. @RepStephenLynch. https://t.co/yorQPo6wz4
– Congressman Rashida Tlaib (@RepRashida) December 2, 2020
The bill was heavily rejected by the crypto community. The Head of Strategy at CoinShares, Meltem Demirors, answered on Tlaib’s tweets saying “Cryptocurrencies are lowering the cost of servicing populations historically excluded from the banking sector”.
That was added Introducing the law would increase costs, increase compliance, and limit access to the populations Tlaib seeks to protect.
Circle CEO and Co-Founder Jeremy Allaire stated this in a thread of eight posts on Twitter The bill “would represent a major step backward for digital currency innovation in the US and limit the accelerated progress of both the blockchain and fintech industries.”.
Tyler Lindholm, Wyoming House Representative believe What The law goes against the basic ethics of decentralizing the cryptocurrency sector::
“Centralization of power for a decentralized world. No thanks. This industry has been light years more successful in giving non-banks financial freedom, and it has done so without cronyism as suggested in this bill. “
The Shapeshift CEO, Erik Voorhees, divided Your opinion that the bill is doomed::
“Let’s not force cryptocurrencies to act like banks … (and in fact they can’t and they won’t).”