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US Congress to Face “Stable Act” Bill Concerning Stablecoins’ Fate

08 December 2020 11:32, UTC
Nick James

On December 2nd, the United States Congress received a new bill dubbed “ The Stable Act”, which aims to make any usage of stablecoins in the United States without permission from federal regulatory bodies illegal.

The wording may sound confusing at first, but this does not mean that people who already have stablecoins will be charged with some sort of fine if they relocate their capital. This bill only has to do with the offering and commercialization of stablecoin within the country’s jurisdiction.

It’s not necessarily known whether or not Congress will be unanimous towards passing this bill, but the absolute uproar that it caused with the crypto community could turn it into an extremely hard battle to fight. This is especially true, considering that Congress is nearing the end of its term and will see new faces take seats very soon.

Who will regulate stablecoins?

Should the bill pass, there will be a couple of federal government agencies that will take stablecoins under their wing. This could be an appropriate Federal banking agency, the board of Governors in the Federal Reserve System, or other regulators such as the SEC or the CFTC.

The main idea behind having such a strict approach to stablecoins is the attempt to spare consumers the risks that these currencies could produce, especially when they’re distributed by bodies not previously approved by the federal government.

However, most traders are already aware that this bill was designed to combat projects like Facebook’s Libra, which is nearing completion and launch in 2021. The main issue is that other projects that have a similar design are being caught in the crossfire, and unfairly swept under the rug even though they had an amazing opportunity to revamp the United States economy.

Should Congress pass this bill, it doesn’t necessarily mean that all is lost. The Senate would have to agree on this particular issue as well, and that may not happen for a long time as the United States nears a very important transition period in January. This doesn’t mean the bill will keep hanging in the air though. It’s not necessarily known whether Trump has a stronger stance against cryptocurrencies than Biden, so the outcome for the bill should be identical regardless of the administration that is in power.

The crypto community reacts

24-07-2020 19:00:59  |   News
As already mentioned, the bill was completely uncalled for, which is why influential people from the crypto community have already tried to raise awareness about it. The CSO of CoinShares outlined the importance of stablecoins as a method of helping the unbanked population within the nation by making these services a lot more accessible for them and a lot cheaper for the government or private company to provide it. And although Demirors didn’t mention it directly, US-based stablecoin projects are guaranteed to help with other countries as well, thus diversifying the project across the whole globe.

But not all is lost at the moment. Congress may severely delay a response to the bill or simply leave it hanging, as it is most definitely not a pressing matter at the moment. The most likely outcome is that stablecoins will remain as they are at the moment, or the bill will receive at least some amendments to make it more comprehensive for anyone willing to provide offers on it.

Image from Cryptonomist