I was able to read the bill a week or so ago, it appears they’re trying to capture Libra under securities regulations but the definition of “managed stablecoin” is too broad and could potentially apply to even Maker and other stablecoins.
What I don’t understand is, if the product is meant to keep a stable value there is no expectation of returns on “investment” in the stablecoin. If anything they should be treated as foreign currencies.
There’s so much regulatory uncertainty that such legislation would need to be part of a broader more comprehensive bill addressing cryptocurrency. There needs to be exceptions for “sufficiently decentralized” protocols, cryptos, etc. Even then, it makes no sense to categorize centralized stablecoins like USDC, GUSD as securities.
Edit: This bill likely won’t apply to USDC and GUSD as they as backed one-to-one with the US dollar, which isn’t considered an asset covered by the bill.
> There needs to be exceptions for “sufficiently decentralized” protocols, cryptos, etc.
As you pointed out in the edit, an exception will likely be introduced for 100% backed stablecoins. The reason for this is because it maintains a demand for USD and there's little threat of USD being made irrelevant. This is their main concern with Libra and is also the reason why DAI will fall under the umbrella of this bill. It doesn't matter if it's decentralized, it threatens their financial monopoly, which all their other monopolies depend on.
These are congressional representatives we're talking about here.
Have you *seen* or *heard* some of these people? They are nowhere near the brightest the US has to offer from the ranks of its 320+ million citizens - and I'm looking squarely at both sides of the aisle when I say that.
I have absolutely zero faith that these "representatives" can:
- even understand / comprehend the concepts we're discussing here
- even if they could, act in good faith long enough to deliver fair and appropriate legislation