Crypto Community Comes Down Heavily on Stablecoin Bill
A new bill proposed to Congress strives to regulate the whole stablecoin market by asking all related activities to have federal approval first. This resulted in prominent personalities from the cryptocurrency industry coming down heavily to a submitted Congressional bill that would massively regulate stablecoin issuers.
Three Members of Congress Have Proposed a Bill Called STABLE Act
Today, Congresswoman Rashida Tlaib published the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, in association with other Representatives Jesús “Chuy” García and Stephen Lynch.
Dubbed “The Stable Act,” the bill is designed to “protect consumers from the risks posed by emerging digital payment instruments, such as Facebook’s Libra and other Stablecoins.” Yet, with just a month to go until the end of the 116th Congress, the bill encounters some difficulties in being accepted in time. A triad of Democratic lawmakers has proposed a bill that would govern stablecoins, including Facebook’s Diem (previously Libra).
Assistant Professor at Willamette Law, Rohan Grey, described on Twitter that while the bill is fundamentally directed at private stable coins distributed by big tech firms, it was written in such a style as to cover a “wide range of monetary activities.” Grey further stated that the bill asks “to prevent the kind of systematic ‘shadow-banking’ risks that led to the global financial crisis of 2007–2008.”
The Cryptocurrency World Reacted Strongly
The proposed bill provoked cryptocurrency enthusiasts, with most of them not giving in. The bill is apparently addressed to defend low-and-moderate-income customers who have seen themselves locked out of the conventional banking division. The US lawmakers are pushing the argument for regulation that bars cryptocurrency firms from embracing the bad practices of big banks and further marginalizing weak populations.
Meltem Demirors, CoinShares’ Chief Strategy Officer, tweeted that the bill would do the reverse of what it aims:
Jeremy Allaire, CEO of Circle stated that any move from Congress in this field should be concentrated on adopting, investing in, and promoting the pace of unrestricted innovation.
Mike Dudas, founder and CEO of The Block, also shared that from the looks of the draft, Congress might force him to go Republican.
With the US likely directed toward another two years of a split government, this bill is unlikely to pass and be crafted into law. Meanwhile, in the EU region, things are not looking very good for stablecoin issuers either.