- A stablecoin related bill has been introduced to the US Congress members
- The bill wants to gain the overall control of the stablecoins
- If the bill becomes law, the stablecoin issuers will have to ensure the liquidity of the token
- The Act can stop the big tech giants from entering the banking sector
Last week, Rashida Tlaib, the US congress representative, sponsored a new bill to Congress members regarding stablecoins. Along with Tlaib, the chairman of the Task Force on Fintech, Stephen Lynch, and house representative Jesus Chuy Garcia were the introduced bill’s co-sponsors. It is found that the bill seeks to gain full control of stablecoins, which made the crypto community react strongly against the proposal.
Tlaib considers issuer of stablecoins as bad actors
According to a press release related to the proposal, the bill’s sponsors and co-sponsors are considering the issuer of the stablecoins as bad actors. The three congress members who issued the bill described that the bad actors looking to issue their stablecoin could confidentially exploit the user vulnerabilities. The threat is also combined with the financial strains of the COVID-19 pandemic, which necessitates the STABLE Act.
What does the introduced bill seek?
It is found that the newly introduced bill seeks to get complete control of stablecoins. The Act will require the issuer of such tokens to obtain a banking charter. Any firm that will offer such coin-related services will have to follow the exact banking principles under the existing jurisdictions. Before issuing stablecoins in the nation, any firm or bank will have to get approval from the FED, the FDIC, and other appropriate agencies six months before issuing such tokens. Most importantly, the issuers of such tokens will have to obtain FDIC insurance, or maintain reserves at the FED, so the issuer could ensure that the issued tokens can be converted into USD at any time.
What do the representatives think about the cryptocurrency?
According to Tlaib, it is critically important to get on the curve and prevent virtual currency issuers from repeating the crime against low and medium-income residents of the nation. Amid the global COVID-19 pandemic, the STABLE Act’s protection, from the Office of the Comptroller of the Currency to the FED to such fiat pegged tokens, has become too important.
According to representative Lynch, the bill is a step towards protecting the nation’s finances and ensuring safety in the financial sector. Additionally, he targeted Facebook also for its stablecoin and mentioned that the social media giant has even attempted to take advantage of the financial gap in the market.
However, this Act can shut the door of Big Tech firms to enter the banking space.
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