Crypto Industry Votes No to Stablecoin Bill in Congress

In the letter

  • Three members of Congress have proposed a bill to regulate stable coins.
  • The STABLE Act would keep stable coin issuers by the same standards as banks.
  • Some proponents of the cryptocurrency believe this will stifle innovation and further marginalize under-banked communities.

These are the last days of the 116th Congress, which ends on January 3, 2021. All bills that have not become law by then will die with it.

But there is still plenty of time to kick the hornets’ nest Crypto Twitter!

Congresswoman Rashida Tlaib announced today the Stablecoin Tethering and Bank Licensing Enforcement Act (STABLE), which is jointly sponsored by Representative Jesús “Chuy” García and Representative Stephen Lynch.

The proposed bill, which has almost no chance of becoming law, angered cryptocurrency enthusiasts on Wednesday night.

That’s because the bill, which is aimed directly at stablecoin companies like Tether and the SC-curious Facebook, requires any company that issues a stablecoin to have a banking charter and needs to be approved by the Federal Reserve and FDIC – none Trifle for digital asset businesses.

Stable coins are a type of cryptocurrency whose value is tied to another asset, often the US dollar.

The bill allegedly aims to protect low and middle income consumers who are excluded from the traditional banking sector. Tlaib et al. Pushing for regulation that prevents cryptocurrency companies from adopting the bad habits of big banks and further marginalized vulnerable populations.

CoinShares chief strategy officer Meltem Demirors said the bill would do the opposite of what it intended:

“Cryptocurrencies lower the cost of servicing populations that have historically been excluded from the banking sector,” she wrote. “Increasing costs and compliance obligations are forcing companies to cut access for unprofitable customers.”

Jeremy Allaire, CEO of Circle, which publishes the USDC stablecoin, played on innovations that came from outside traditional banking: “The STABLE Act would be a huge step backwards for digital currency innovation in the US and would limit the accelerated progress of both countries . ” Blockchain and Fintech Industry. “

Willamette University College of Law Assistant Professor Rohan Gray, who contributed to the bill, responded that innovators need guard rails. “Oh, the purpose of regulations is to give industry actors what they want?” he wrote. “Some people want to pretend ignorance of banking history is a position of principle.”

In the meantime, the cadets of the XRP Army think this is not that bad – especially the part that prescribes stablecoins must keep a reserve of $ 1 for every stablecoin issued.

With the US likely headed for two more years of divided government, this bill may not be talked about much until after this week. Instead, cryptocurrency users should expect the government stability version – legal and regulatory deadlock – with or without coins.