This seems like a fairly level-headed bill that recognizes that organizations that create stablecoins are not materially different from banks, these coins aren't materially different from dollars and therefore should have to follow the same rules as banks.
We can have a looong discussion about the regulations that surround banks but that doesn't change whether these entities are banks.
Many stablecoins started out with claims of being fully backed. Over time, they then retreated into more ambiguous territory, and independent audits were few and far in between.
Putting stable coin issuers under banking regulations would have obvious benefits for the public in terms of trustworthiness. It would even have benefits for the no-coin public by reducing systemic risk. And it would have benefits for stable coin issuers and crypto exchanges by making it easier for them to establish conventional banking connections for their customers — right now, the on/offramps for many of exchanges seem to look dangerously close to money laundering in many cases.
For instance, the largest stablecoin right now, Tether:
* Has never been independently audited, and the size, composition, and location of its reserves is not known.
* Has ownership with significant overlap with Bitfinex, one of the larger Cryptocurrency exchanges, and seems to have commingled funds with them to some extent.
This is really a situation that ought to be audited sooner rather than later. And, whether that audit reveals massive fraud or an upstanding, misunderstood business, the cryptocurrency community should welcome such transparency.
It's a cryptocurrency whose value is pinned to a traditional currency because the organizational backer is willing to issue and redeem it 1:1, but it can be traded using cryptocurrency mechanisms.
It is a $25 billion market that has grown over most of the last decade. Expected to continue growing at a fast pace, with all major central banks looking to release their own version for their respective monetary unions.
They are digital assets that are convertible one for one to fiat currencies or assets held by a custodian's account with a bank or brokerage. Not all are convertible and they maintain their stable exchange rate by other means.
They primarily use blockchains like Ethereum for their settlement layer, while keeping their fixed exchange rate, so therefore they inherit all the technology to leap frog the legacy financial system and service people marginalized from that system.
The pattern of people that would seek to promulgate this bill is that they believe the "unbanked" are victims who can only be cured by banking them.
This is a distortion and perversion of what representatives and their constituents really want, which is financial security and access to credit.
They lack inspiration to see that the infrastructure being created in the non-bank private sector is also aiming to create a more egalitarian system, which does not require banks.
That’s the direction all central banks are headed, although the ECB is ahead of the pack. I expect the Fed to get there with the same delays and feet dragging US financial infrastructure is known for.
People want stable currencies, not the ability to transact day to day with volatile commodities having no intrinsic value.
> “Getting ahead of the curve on preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that traditional big banks have is- and has been- critically important,” said Congresswoman Tlaib. “From the OCC to the Federal Reserve to those peddling stablecoins 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.”
You mean this part? I was going to downvote you, but it does seem a bit demagogic, because other minorities besides blacks are being financially exploited too. People of all colors can make bad financial decisions, it's not their color but their lower income and education.
Ideally, I'd expect legislation to steer these eCoins to less muddy waters for everyone, not to appeal to emotion.
[+] [-] tristanj|5 years ago|reply
See these posts by dang for why https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...
[+] [-] jpkoning|5 years ago|reply
[+] [-] vmception|5 years ago|reply
Its a “they did what!?!” as much as any article about company or VC or influential person
[+] [-] Spivak|5 years ago|reply
We can have a looong discussion about the regulations that surround banks but that doesn't change whether these entities are banks.
[+] [-] microtherion|5 years ago|reply
Putting stable coin issuers under banking regulations would have obvious benefits for the public in terms of trustworthiness. It would even have benefits for the no-coin public by reducing systemic risk. And it would have benefits for stable coin issuers and crypto exchanges by making it easier for them to establish conventional banking connections for their customers — right now, the on/offramps for many of exchanges seem to look dangerously close to money laundering in many cases.
For instance, the largest stablecoin right now, Tether:
* Has issued $16B in new currency in 2020 alone, after starting the year with $4B total: https://coinmarketcap.com/currencies/tether/
* Has never been independently audited, and the size, composition, and location of its reserves is not known.
* Has ownership with significant overlap with Bitfinex, one of the larger Cryptocurrency exchanges, and seems to have commingled funds with them to some extent.
This is really a situation that ought to be audited sooner rather than later. And, whether that audit reveals massive fraud or an upstanding, misunderstood business, the cryptocurrency community should welcome such transparency.
[+] [-] snicker7|5 years ago|reply
[+] [-] minikites|5 years ago|reply
[+] [-] geuis|5 years ago|reply
[+] [-] geofft|5 years ago|reply
[+] [-] ASalazarMX|5 years ago|reply
https://en.wikipedia.org/wiki/Stablecoin
[+] [-] free2OSS|5 years ago|reply
[+] [-] vmception|5 years ago|reply
They are digital assets that are convertible one for one to fiat currencies or assets held by a custodian's account with a bank or brokerage. Not all are convertible and they maintain their stable exchange rate by other means.
They primarily use blockchains like Ethereum for their settlement layer, while keeping their fixed exchange rate, so therefore they inherit all the technology to leap frog the legacy financial system and service people marginalized from that system.
[+] [-] vmception|5 years ago|reply
This is a distortion and perversion of what representatives and their constituents really want, which is financial security and access to credit.
They lack inspiration to see that the infrastructure being created in the non-bank private sector is also aiming to create a more egalitarian system, which does not require banks.
[+] [-] leetcrew|5 years ago|reply
1) some people are underserved by traditional banks
2) as a result, they might turn to stablecoin issuers and potentially be exploited
3) therefore we must restrict stablecoins so they can only be issued by traditional banks
seems like a lot of work just to go back to step 1).
[+] [-] dsr_|5 years ago|reply
[+] [-] toomuchtodo|5 years ago|reply
People want stable currencies, not the ability to transact day to day with volatile commodities having no intrinsic value.
https://www.ecb.europa.eu/euro/html/digitaleuro.en.html (“A digital euro”)
https://www.bis.org/publ/work880.pdf (“Rise of the central bank digital currencies: drivers, approaches and technologies”, pdf)
[+] [-] unknown|5 years ago|reply
[deleted]
[+] [-] dudus|5 years ago|reply
[+] [-] free2OSS|5 years ago|reply
Is it nonsensical emotional junk used to move the uneducated masses?
I'm no Trump supporter, but when I hear something so disconnected from policy it has a "Mexico will pay for it" vibe.
Edit- you guys read the article?
[+] [-] ASalazarMX|5 years ago|reply
You mean this part? I was going to downvote you, but it does seem a bit demagogic, because other minorities besides blacks are being financially exploited too. People of all colors can make bad financial decisions, it's not their color but their lower income and education.
Ideally, I'd expect legislation to steer these eCoins to less muddy waters for everyone, not to appeal to emotion.