Stablecoins came as a boon to those who feared the volatile nature of cryptocurrencies. While certain governments seemed to be more accepting of stablecoins as opposed to cryptocurrencies, several platforms began rolling out their private stablecoins. As the financial universe is piled with stablecoins, a United States’ Congresswoman decided to probe these assets, while proposing a new act to regulate stablecoins.
Stablecoins Fall Under The Purview Of US Congress
Rashida Tlaib, a Congresswoman with Congressmen Stephen Lynch and Jesus Garcia penned down a press release that pointed out the introduction of a new bill. The bill will reportedly protect consumers from the risks that arise with the use of stablecoins by scrutinizing them from the issuance process itself. The members of the Congress particularly went on to mention Facebook’s Libra project now known as Diem. Keeping this in mind, Congress proposed the “STABLE Act”. This act which is an acronym for Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act, intends to regulate the stablecoin market as the members entering the market have been on a surge.
Elaborating on the same, Congresswoman Tlaib said,
” […] the protections the STABLE Act would make possible are more needed than ever amid a pandemic that will breed riskier financial decisions out of necessity because our federal government continues to fail us all by not providing adequate relief legislation.”
With this latest act, anyone who intends to issue stablecoins would be mandated to seek the approval of the Federal Deposit Insurance Corporation (FDIC), FED along with several other banking entities. Any stablecoin that has been issued without the approval of the aforementioned entities would be categorized as illegal.
The Congresswoman took to Twitter to share the announcement with the public.
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
While some lauded the Congresswoman for the formulation of the latest act, a few others, especially from the crypto-verse denounced the latest move of the Congress. Tyler Lindholm, the Wyoming House Representative, also called out the Congress for this move and tweeted,
“Centralization of power for a decentralized world. No thanks. This industry has been light years more successful in bringing financial freedom to the unbanked and that happened without cronyism as suggested in this bill.”
Not long ago, Congresswoman Tlaib had written an elaborate letter dissing the Acting Comptroller of the Currency [OCC], Brian Brooks’ “unilateral” set of actions that was inclined towards the digital assets industry.