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Source: coindesk.com ·
A new bill would require stablecoin issuers to secure banking charters and either maintain full reserves or gain FDIC cover for its tokens.
Emin Gün Sirer - @el33th4xor
1 month ago
Things are getting interesting. https://t.co/iKe8mjKHoi
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Dovey Wan - @DoveyWan
1 month ago
https://t.co/hcKWAiUJFl any bad news to fiat coin, aka fiat crypto twin, is good news to #Bitcoin
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JTrader126
1 month ago
Anyone else not surprised to see it’s the far Left democrats wanting to control how we use our money?
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Cliffs-Brother-Joe
1 month ago
so if this passes, (probably not), what will happen to current stable coin in circulation? What if you have GUSD or whatever on an exchange? Are you holding "illegal assets". Will Gemini or whomever kill it and make it worthless?
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alicenekocat
1 month ago
The DAI case is gonna be big if this bill were to pass. Will they go after CDP owners? Maker? Will it be deemed impossible to enforce?
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Astramie
1 month ago
Regulatory bodies are not our enemies unless we make them. If we want crypto to survive, we have to play their game and change the system over time. This bill sounds like it won't achieve its goal and only harm networks, so we should be vocal in a way that doesn't make us sound crazy and lose credibility with lawmakers. Yes our objective is to revolutionize the banking industry, but we don't want to demonize the people who are holding the keys to the door. Remember, all it takes is one ban on exchanges to make it harder to adopt. Play smart. I think Cardano understands that getting along with regulatory bodies is key to our future survival.
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crc128
1 month ago
You are absolutely correct. I bring this up because it is a great example of what regulation without our involvement looks like. They get it mostly wrong, target irrelevant things, and break everything else along the way. Way too much collateral damage.
The author has correctly identified a problem, but the proposed solution is vastly unfit for the problem identified, and (from interacting with him on Twitter) has no idea why he's wrong. It is up to the crypto community at large to work with these people to make regulations good.
Just look what IOHK was able to help build in Wyoming, along with Caitlin Long and Tyler Lindholm (and others). The regulatory environment there is so rational and welcoming, that they are being inundated with new crypto entrepreneurship! That's what good regulation looks like.
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W944
1 month ago
I read that Facebook might have contributed to this bill to keep competition out. FB would be able to afford the compliance - others not. Market share win for Libra/Diem.
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Rugbynnaj
1 month ago
As it currently stands to be a stable coin issuer or you have to be either a trust company, have a trust company backing an issue in your stable coin and holding the Fiat, and you have to have a money transmitter license in every state in which you do business. A State Bank charter still only allows you to hold the Fiat in that state and you have to get a money transmitter license in every other state. A federal bank charter is actually the only existing legal way in order to legally have stable coins. So they're not actually asking for anything that doesn't already exist. Am crypto lawyer, currently actively working on issuing two legitimate legal stable coins for companies. Teach class at law school on crypto and financial institutions.
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ItsAConspiracy
1 month ago
I'm wondering whether this new bill applies only to stablecoins backed by offchain assets, which might make sense, or would also apply to those which are just smart contracts holding ETH.
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Always_Question
1 month ago
I don't think the proposed bill makes any distinction. Because, well, our body politic largely comprises boomer technological luddites. And those lobbying for these changes are legacy financial institutions.
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DredgerNG
1 month ago
I think that is not necessarily bad. Look at Tether. There should be some kind of regulation on stable coins. But approval from FED? LOL. The only one they will approve will be their CBDC
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Revorocks
1 month ago
Crazy bill. Suggesting that nodes can be liable for the blocks they publish?
That is exactly the attitude of EU lawmakers with their new laws wanting to make websites like facebook and youtube liable for the content that their users upload. It's absurd.
So, if a filecoin user has illegal content, does that make all nodes liable for that too?! madness.
I am not against regulation of the stablecoin industry, it does need it and will happen, but this kind of bill is not the way. They should be making NEW charters for crypto, not applying legacy banking rules to it.
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Astramie
1 month ago
Yes and they are confused because the networks are decentralized, they don't know who to pin the liability to. It's like when ETH DAO hack happened, Vitalik and other devs got calls from federal agencies asking who should be held liable for the tens of millions lost. They can't hold the code liable.
They are asking "how do we know people are getting what they are promised when it comes to buying stablecoins?"
It's a valid question, and the intention to protect users is sincere since there are so many scams out there and will get worse as more try buying crypto. They just don't know how to address those concerns without destroying the industry with their ignorance. They need to consult with more experts in the industry.
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Norrisemoe
1 month ago
This is where I probably make myself look stupid but what the flying fuck does race have to do with this law?????
They say that it is to protect people of colour..... Wtf so white people are so much better than everyone else that they don't need protecting? Why did race even have to be brought up in this bill???
Please these are genuine questions. Perhaps there is some history here that someone can explain to me.
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ryan0302
1 month ago
There is no history, they're using race to make you feel bad and have it approved. Fuck these people.
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Norrisemoe
1 month ago
The truth is I'm bold enough to ask on Reddit a question like that as the worst that happens is I am called a racist. I wouldn't say a word in person as that would be potentially career ending if it blew up somehow. I cannot be the only person to think that way.
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senfplus
1 month ago
Money is might and might is money. The people currently controlling money fear they will loose their might. That's why they come up with this not because of "low- and moderate-income residents of color".
So hopefully this bill will never be adopted. If it will, as by experience, the US will enforce it on all individuals and companies, independent of their relations or none relations to the USA.
Then the question will be if DAOs like Maker can continue to operate even if this violates this law.
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paulosdub
1 month ago
Playing devils advocate, Does it need to be enforced to put people off it? I.e you want mass adoption but that could be hindered by perceived regulatory issues....not saying thats the case, just thinking out loud really
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crc128
1 month ago
Submission statement: this legislation, ostensibly directed at stablecoin issuers, could have wide-ranging effects on the chains themselves.
The primary architect of the law has already said that nodes acting on the contracts could be subject to liability.
Given that Cardano is constructed to be decentralized, but only have a few (1000-2000) PoS nodes, this could be an issue. Any which are located in the US would potentially be covered. Also, due to the unique nature of Cardano nodes, they may be relatively easy to find by motivated regulators.
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JDepinet
1 month ago
cardano nodes are also REALLY easy to move. if regulators start hustling pool operators, the next day there wont be any pool operators in that country.
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PaulMorphyForPrez
redditor for 3 months 1 month ago
And there justification is... racism
“Getting ahead of the curve on preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that traditional big banks have is—and has been—critically important,”
https://tlaib.house.gov/media/press-releases/tlaib-garcia-and-lynch-stableact
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jolly_octopus
1 month ago
I mean, her job is to legislate, not be attractive. Kind of rude and unnecessary of you to say something like this.
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jolly_octopus
1 month ago
What exactly about her social media makes her a terrorist? Just curious to know.
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jolly_octopus
1 month ago
Ok, thanks for confirming that I'm talking to an idiot who can't have a real conversation
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posizzle26
1 month ago
The fed is scared of cryptocurrencies, and this is their attempt to retain power as stable coins and bitcoin threaten the dollar. This bill would do the furthest thing from aid the underbanked. This allow bankers to continue to take advantage of others and line their own pockets. It will do the exact OPPOSITE of everything it claims. Rashida Tlaib is a fool
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stacksof_cash
1 month ago
Overall it makes sense the FED would want some oversight on such instruments since things like USDC are just an abstraction of the US Dollar to collateralize an ERC20 token. Coinbase and others would be made to hold a reserve account with the FED like any other bank under these meta-Dollars. Its not much of a stretch since exchanges like Coinbase are already functionally a bank already.
It is interesting however that clearly the incumbent monetary system isn't fighting this technology anymore and are in their own ways adopting it. I can see a situation where every bank issues their own Dollar stablecoins that bypass the nighmarish maze of proprietary, ancient systems like Swift and ACH, coming to totally replace the old Dollar standard completely eventually.
I wish them good luck regulating algorithmic stables like Dai though.
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user4morethan2mins
1 month ago
Why not USDT? Because company issuing USDT isn't in U.S.? I was of the understanding that if it's offered to U.S. customers, then that is enough for legal coverage and hence U.S. exchanges wouldn't use USDT
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user4morethan2mins
1 month ago
Gotcha. So the U.S. government could legislate that U.S. exchanges can not offer non- compliant stable coins, maybe?
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brd111
1 month ago
And guess who would benefit most from this type of regulation. Facebook is in a great position to get a charter and has plenty of money to back their own currency. Facebook probably wrote this bill.
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brd111
1 month ago
No. I suppose you can't hear my tone. The democratic party is cozy with facebook. This is clearly facebook creating barriers to entry in the market that they are jumping into with libra. They have been calling for all kinds of regulation lately because they get to write it, they can afford compliance, and it reduces future competition.
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brd111
1 month ago
I suppose so. I don't personally invest in Facebook but some of my passive investments have mutual funds in them which of course have Facebook. I guess if you can't beat them join them. I will personally be doing something different
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richnun
1 month ago
Trade your passive investments into trading stocks and messing with options. It's countless fun during market hours. But careful, it can be more volatile than cryptos.
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brd111
1 month ago
Yeah unfortunately simple IRA funds can't be moved for two years from origin of the account. Trust me they will be moving. Something you will never hear from a financial advisor is that tax advantaged accounts are great for high frequency trading because you are not creating tax events with every sell. Ironically my regular brokerage account has longer term positions in it so I don't create tax events.
I hit the miracle of all iron condors on Costco during the downturn earlier in the year.
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PaulMorphyForPrez
1 month ago
To prevent racism, of course. From the legislatures press release.
>“Getting ahead of the curve on preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that traditional big banks have is—and has been—critically important,”
https://tlaib.house.gov/media/press-releases/tlaib-garcia-and-lynch-stableact
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Dr-Swagtastic
1 month ago
Racism?!?! You can’t even see the person that is buying or selling.
Pretty hard to tell someone’s race by the serial number on a wallet.
What a fucking joke! Best part is these retards will eat this shit up.
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PaulMorphyForPrez
1 month ago
They are selling it to uninformed minority voters. I expect racism accusations to ramp up too. NYTimes just published a racism piece aimed at Coinbase as well. Crypto community is mostly white and asian and making a lot of money, making it easy to stir up division from other ethnic groups.
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Dr-Swagtastic
1 month ago
Lack of good education = less investment knowledge
Perhaps they should fix the shit inner city schools rather than targeting an asset. They are using racism and covid as an excuse to take freedoms away at every turn. The sad part is people are dumb enough to believe it.
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PaulMorphyForPrez
1 month ago
>Perhaps they should fix the shit inner city schools rather than targeting an asset.
To be fair here, the problems with those schools are mostly due to bad parenting. Parenting is the biggest factor in a schools success and its very hard to compensate for.
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Dr-Swagtastic
1 month ago
Either way to say an asset is racist that anyone can freely buy is insane. It’s like saying gold and silver are racist. It makes no sense.
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alicenekocat
1 month ago
"Let's prevent stablecoin issuers to act like banks by forcing them to act like banks".
You cannot make this up.
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L0di-D0di
1 month ago
> ...crimes against low- and moderate-income residents of color that traditional big banks have is—and has been—critically important,”
Ah yes... when in doubt, inject race into the conversation and push the bill through with expediency. Also helps to use ambiguous keywords like "people of color" for sympathetic bonus points from people who don't want to be accused of supremacy. She's good, very good.
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PaulMorphyForPrez
1 month ago
Its interesting that this came right after NY Times tried to paint Coinbase as racist too.
There is a good chance we are going to see more of this stuff. For example, articles suggesting crypto communities are racist, so their complaints should be ignored.
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TheDesertWalker
1 month ago
>For example, articles suggesting crypto communities are racist
It certainly doesn't help when crypto related hashtags on twitter are filled with pepe edge lords. Community image matters. Crypto could do without an association with 4chan memers.
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PastelArpeggio
1 month ago
They're getting campaign contributions and promises of cushy "consulting jobs" from established banks and lawyers who specialize in finance. (edit: while at the same time looking like they're "tough on corporations and fat cats" to people who are some combination of naive, uninformed or just not very bright).
It's the DC way.
Read *Government's End: Why Washington Stopped Working* and then realize that book was written \~20 years ago and everything has just gotten worse.
edit 2: another trick is for politicians to cry "THIS NEEDS TO BE REGULATED!" then once they have regulatory power, they shake down businesses for campaign contributions under implicit threat of regulating a specific business to death. The power to tax and regulate is the power to destroy.
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jolly_octopus
1 month ago
Given how shady Tether is and how much money people could lose if Tether goes under, that's actually a pretty valid argument. This would be one way to force stablecoin issuers like Tether to go under audits.
And before I get a wave of downvotes - I hate this proposed bill, I hope it never sees the light of day, and I think she doesn't understand or care to understand what crypto is all about. There's no reason to require a stablecoin issuer to have a banking charter, that's unreasonably restrictive. Just make them go though audits.
This line especially grinds my gears: “Getting ahead of the curve on preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that traditional big banks have is—and has been—critically important,” As someone who grew up in a low income POC (I won't say which color) household, fuck lumping all of us in one bucket. Fuck bringing race into this for no reason. Fuck her for assuming people cant make their own decisions and do their own research. Crypto is good for me.
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cantreadcantspell
1 month ago
That passage is just a dog whistle, plain and simple. Hopefully, there's people left in Congress who've got their head on straight and try to understand issues from an objective point of view.
On that note: does this bill have a reasonable chance of becoming law?
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