Are stablecoins too dangerous for the general population? This is what members of the US Congress believe. They have tabled a bill that worries the crypto community …
A bill that threatens stablecoins?
CEO Coinbase Brian Armstrong, launched the warning last week: proposals for drastic regulation of cryptomonnaies were coming to the front of the stage . Have we just witnessed the first offensive? Rashida Tlaib, a congresswoman from the United States, explained why she believes this law is essential to regulate stablecoins. It would be about protecting the vulnerable citizens of the United States, so that the “ crimes of the big banks” are not reproduced by this new industry.
“Particularly in the midst of the Covid-19 pandemic, their vulnerabilities could be exploited and masked by malicious actors who wish to issue stablecoins, like other currency issuers in the past. “
Very strict regulations
The proposed law is particularly strict: it prohibits anyone from issuing a stablecoin or providing a product / service related to stablecoins, “ without obtaining written approval in advance and each time from the appropriate federal banking agency, the Corporation and the Board of Governors of the Federal Reserve ” .
As several experts have pointed out, the wording of this proposed law is broad enough to include a whole variety of activities related to cryptocurrencies . The idea is to regulate the cryptocurrency sector even more strongly than the banking sector, in order to avoid the practices of “ shadow banking“ , that is to say banking systems which operate in parallel with traditional banks.
The crypto community stands up against the proposed law
Unsurprisingly, the crypto community unanimously condemned this proposed law . Jeremy Allaire, CEO of Circle, explained why he thought it was bad for the industry . He recalls that it would first of all prevent the sector from innovating, which would put the United States in danger of falling behind in the development of the blockchain and FinTech industry .
In addition, Jeremy Allaire recalls that vulnerable populations have been able to have access to financial services thanks to companies that operate outside traditional banking systems:
“A huge part of the innovation brought to low-bank people and small businesses has come from non-bank FinTech companies (Stripe, Square, PayPal, Circle, Coinbase, Apple, Google and many more) . “
The crypto community is therefore interpreting this bill as a way to control parallel payment systems , which concerns Congress. However, it should be noted that there is only one month left in Congress to pass this law, before the change of government is enacted. It might therefore be difficult for its members to get this proposal approved.