A new bill, introduced to the US Congress this week, could enforce blanket regulation on all stablecoins. If passed, any service provided concerning stablecoins would become illegal without first receiving multiple government bodies’ approval. The proposed bill, dubbed “The Stable Act,” is meant to “protect consumers from the risks posed by emerging digital payment instruments, such as Facebook’s Libra and other stablecoins.” Lawmakers around the world are working on crypto regulations in some capacity.
The proposed bill would make providing stablecoin services illegal unless approved by federal authority.
The proposed bill states, “It shall be unlawful for anyone to issue a stablecoin or related product, to provide any stablecoin-related service, or otherwise engage in any stablecoin-related commercial activity, including activity involving stablecoins issued by other persons, without obtaining written approval in advance, and on an ongoing basis, from the appropriate Federal banking agency, the Corporation, and the Board of Governors of the Federal Reserve System.” The bill intends to protect consumers from the risks posed by emerging digital payment instruments. However, with just a month to go until the end of the 116th Congress, the bill faces an uphill battle to be approved in time.
Preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color traditional big banks have is critically important. That's why I'm proud to introduce the #STABLEAct with @RepChuyGarcia and @RepStephenLynch. https://t.co/yorQPo6wz4
— Congresswoman Rashida Tlaib (@RepRashida) December 2, 2020
The Crypto community expresses disapproval for the proposed bill.
The proposed bill has been met with strong disapproval from the crypto community. CoinShares chief strategy officer Meltem Demirors responded, saying that cryptocurrencies lower the cost of servicing the populations that have historically been excluded from the banking sector. She added that by introducing the Act, costs and compliance would increase, and as a result, cut off access to the very people groups the US Congresswoman hopes to protect. Circle CEO and co-founder Jeremy Allaire tweeted that the act “would represent a huge step backward for cryptocurrency innovation in the US, limiting the accelerating progress of both the blockchain and fintech industry.”