The digital assets market has seen several ups and downs over the years with regulations playing a key role in deciding its fate. The past couple of years saw a resurgence of positive sentiments within the industry but that seems to have been reversed by the latest STABLE Act bill.
A breakdown of the bill cited that upcoming issuers of stablecoins need the approvals of relevant banking bodies, the FED and the Federal Deposit Insurance Corporation [FDIC]. This act was seen as a violation of major cryptocurrency principles with Circle chief Executive Jeremy Allaire making his disagreement public on Twitter.
1/8 The STABLE Act would represent a huge step backwards for digital currency innovation in the United States, limiting the accelerating progress of both the blockchain and fintech industry.
— Jeremy Allaire (@jerallaire) December 2, 2020
Allaire was not the only major player in the industry to voice his concern as he joined several other bigwigs to call out the hypocrisy on the part of the United States Congress. He believed that the Stablecoin Act would represent a huge step back for digital innovation in the United States. Many crypto supporters have always pointed out that regulations in the US were a major reason for the stifling of developments.
The Circle CEO targetted the decision for its impact on several major developments made over the years. Instead of affecting what we have built, Congress should focus on elevating these standards so that everyone can use it, said Allaire. He also expressed his concern in his latest Twitter thread which read:
” Any act of Congress in this sphere should be focused on embracing, investing in and supporting the incredible pace of open innovation that is happening with stablecoins and blockchain infrastructure. An enormous amount of the innovation brought to the underbanked and small businesses has been driven by non-bank fintech companies (Stripe, Square, PayPal, Circle, Coinbase, Apple, Google and many many others).”
Several cryptocurrency enthusiasts chimed in by saying that the role of the Fed should be to point out irregularities and not to put a stop to innovation. Allaire built on this argument and gave his two cents on what the governmental body can do in the coming months. In his words, the US government should look at how they can raise the bar for technical and governance standards for stablecoins in the mainland.
Despite the backlash from the cryptocurrency community, the bill introduced by Michigan Democrat Rashida Tlaib was praised by her peers. She was also joined by the Congressmen Jesus Garcia and Stephen Lynch for the initial draft and introduction. It is yet to be seen if the Act would be converted into a bill, an event dreaded by the cryptocurrency community.