A disastrous new bill was recently introduced to Congress:
The STABLE Act, which stands for Stablecoin Tethering and Bank Licensing Enforcement.
Under the guise of “protecting people” it will require stablecoin issuers to obtain a banking charter. Meaning, only banks will be able to issue stablecoins.
There are four major provisions in the bill:
- Require any prospective issuer of a stablecoin to obtain a banking charter;
- Require that any company offering stablecoin services must follow the appropriate banking regulations under the existing regulatory jurisdictions;
- Require that any company or bank issuing a stablecoin to notify and obtain approval from the Fed, the FDIC, and the appropriate banking agency 6 months prior to its issuance and maintain an ongoing analysis of potential systemic impacts and risks;
- And require that any stablecoin issuers obtain FDIC insurance or otherwise maintain reserves at the Federal Reserve to ensure that all stablecoins can be readily converted into United States dollars, on demand.
They said: “Digital currencies, whose value is permanently pegged to or stabilized against a conventional currency like the dollar, pose new regulatory challenges while also represent a growing source of the market, liquidity, and credit risk.”
Indeed it does seem highly suspicious that the act seems to further entrench the interests of juggernauts like JP Morgan Chase, a bank that already has its own stablecoin, to the detriment of those who are looking for alternatives to the banking system rather than forced participation in it.
By C. Edward Kelso from CoinFugazi.com and Naomi Brockwell of NaomiBrockwell.com