The US will consider banning “certain” stablcoins

July 30, 2021

The US will consider banning

The US Treasury Department would be able to impose a ban on certain Stablecoins. Such proposals are contained in a bill introduced in the House of Representatives to create a "comprehensive regulatory framework" for regulating the digital asset market.

The document was authored by Virginia Democrat Don Beyer. He called the current situation in the sphere "ambiguous and dangerous for investors and consumers".

The congressman is convinced that his initiative would provide "basic protection against fraud, theft and manipulation" that has accompanied the industry in recent years.

The bill aims to address the following objectives:

  • Empower the CFTC to regulate cryptocurrencies and the SEC to regulate digital securities once definitions of these assets have been worked out. Provide regulators with legal certainty in relation to 90% of the market for digital assets (in terms of market capitalisation and trading volume);
  • Require transactions to be recorded in a designated repository within 24 hours if they are not on the public blockchain. This will minimise the likelihood of fraud;
  • Add digital securities and cryptocurrencies to the list of 'monetary instruments' under the Bank Secrecy Act. This formalises the regulatory requirements under anti-money laundering, record-keeping and reporting provisions;
  • Empower the Fed to issue the digital dollar as legal tender. Clarify that any other assets do not have a similar status. Give the US Secretary of the Treasury the authority to authorise/prohibit steibledcoins backed by the dollar or other national currencies;
  • Mandate the FDIC, NCUA and SIPC to issue consumer guidelines clarifying the lack of coverage for cryptocurrencies or digital securities;
  • Require FinCEN, the SEC and the CFTC to provide clear definitions of the criteria for requiring firms to register as a digital asset exchange or crypto derivatives exchange, or MSB.
  • Recall that in July, Senator Elizabeth Warren called for tighter regulation of cryptocurrencies in the US. In the same month, Fed chief Jerome Powell questioned the need for stable coins.

Treasury Secretary Janet Yellen announced guidance on the benefits and risks associated with StableCoins.

Boston Fed President Eric Rosengren said in June that Stablecoins threaten the financial system. Fed Vice Chairman Randal Quarles called for stablecoins not to be feared.

Earlier, a study by Yale economist Gary Gorton and Fed lawyer Geoffrey Zhang was released. They predicted a return of the US to the 19th century era of "wild banking" in the absence of proper regulation of stablcoins.

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About the author

Hi there, my name is Zalman Weinberg. I'm enthusiast with over 7 years of experience in cryptocurrencies and blockchain. Professional Trader providing Blockchain solutions to Startups and Enterprises. Expert in all cryptocurrency exchange APIs (BitMEX, Bittrex, Binance, Bitfinex, Kraken, Poloniex, Gdax etc.). I have also worked with multiple Forex broker APIs.

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