A new bill presented to the US Congress on Wednesday could introduce broad regulation on all stable coins. If accepted, any service offered in connection with this type of cryptocurrency will become illegal without the prior approval of several government agencies:
“It is illegal for any person to issue a stable currency or a fixed currency product, offer services that are stable currencies, or participate in stable currency transactions, including activities that include stable currencies issued by others, without obtaining prior written permission on an ongoing basis. basis from the current Federal Banking Agency, the agency and the board of the Federal Reserve System. ”
The bill, called the Stable Law, aims to “protect consumers from the risks associated with new digital payment tools such as Facebook’s Libra and other stable currencies.” However, with only one month left until the end of the 116th Congress, the bill faces a tough battle to get it passed in time.
Willamette Law Associate Professor Rohan Gray explained on Twitter that while the bill was primarily aimed at special fixed tokens issued by large technology companies, it was framed to cover “a wide range of monetary transactions.” Gray added that the bill is aimed at “preventing the systemic risk of” shadow banking “that led to the global financial crisis in 2007-2008.
Democratic congresswoman Rashida Tlaib, the main sponsor of the bill, said the stability bill was designed to protect people of color and other minorities who lack access to regulated financial services.
The bill drew strong opposition from the crypto community. Meltem Demirors, Chief Strategy Officer for CoinShares, responded to Talib’s tweets by saying that “cryptocurrencies are lowering the cost of serving residents who have historically been excluded from the banking sector.”
She added that the introduction of the law will increase costs and compliance with the laws, thereby cutting access to the same groups of people that Tlaib hopes to protect.
In one of eight tweets, Circle CEO and co-founder Jeremy Aller said the law “will be an important step backwards for digital currency innovation in the United States, limiting the acceleration in both the blockchain and fintech industries.”
Tyler Lindholm, spokesman for Wyoming House, believes the law is contrary to the fundamental spirit of decentralization of the crypto sector:
Centralization of power in a decentralized world. No thanks. The industry has been light years more successful in providing financial freedom to those who have nothing to do with banks, and this has happened without the favoritism of this law. ”
Shapeshift CEO Eric Voorhees shared his opinion that the bill is doomed to fail:
“Let’s not get cryptocurrencies to behave like banks? (They actually can not and will not) ”.