- Congresswoman Tlaib said that the STABLE law aims to protect Americans from crypto-related risks.
The STABLE law requires issuers of stable coins to obtain the approval of several U.S. authorities.
According to Jeremy Allaire, the enforcement of the law would be a step backwards for crypto innovations in the US.
Together with Congressmen Jesus Garcia and Stephen Lynch, Rachida Tlaib, representative of the Michigan House of Representatives, has introduced a new bill in Congress that prohibits the use of illegal stablecoins. A press release unveiled this news on December 2, noting that the bill is aimed at improving the protection of U.S. citizens against the risks associated with the rapidly growing crypto market in the U.S. The bill is reportedly entitled Stablecoin Tethering and Bank Licensing Enforcement (STABLE). If Congress passes this bill, companies that provide stablecoin services will need to obtain approval from multiple agencies. Otherwise, their activities would be considered illegal.
Congresswoman Tlaib explained why she decided to introduce the STABLE law,
“Working class communities, like mine in Chicago, already face enormous barriers to access financial services and credit. The deregulation of our financial system by the Trump administration has opened the door for technology companies to consolidate their power by exploiting colored people with products that promise integration but only undermine our banking system.
In their view, the STABLE Act would help promote innovation and protect Americans from new financial technologies and instruments that they want to exploit.
A new and innovative way to spend money
According to Congressman Lynch, Stablecoins offer consumers a new and innovative way to spend their money. He added that the technology can help make financial transactions more efficient and promote financial inclusion. However, the representative believes that there are risks associated with adopting new technologies. Lynch continued, praising Tlaib for recognizing and addressing the need for effective consumer protection.
Lynch went on to say that through the STABLE Act, Representative Tlaib will help ensure that U.S. regulators have adequate tools to protect consumers from bad actors. He added that it would not be wise to outsource the issuance of U.S. currency to private companies, and emphasized that the STABLE Act would guarantee U.S. regulators effective oversight of the implementation of stable coin technology.
Strong resistance from the crypto-community
While the representatives believe that the implementation of the STABLE law would be a significant milestone on the road to consumer protection, the American crypto community is averse to this idea. According to CoinShare’s Chief Strategy Officer, Meltem Demirors, crypto-currencies reduce the cost of providing services to populations that have long been excluded from the banking sector. She added that the passage of the bill would increase costs and compliance obligations, forcing companies to cut off the groups that the congressman wants to protect.
Jeremy Allaire, co-founder and CEO of Circle, also went on Twitter to share his views on the issue. He said the bill represented a retrograde step for digital currency innovation in the U.S. because it would limit the accelerated progress of both the block-chain and fin-tech industries.
Apart from the crypto community, Wyoming representative Tyler Lindholm also criticized the bill,
“Centralization of power for a decentralized world. No thanks. This industry was light years more successful in bringing financial freedom to non-banks, and this was done without nepotism, as proposed in this bill.
Centralization of power for a decentralized world. No thanks. This industry has been light years more successful in bringing financial freedom to non-banks, and this has happened without nepotism as proposed in this bill. https://t.co/vLCkhHMWD7– Tyler Lindholm (@Tyler_Lindholm) December 3, 2020