A new bill introduced in the U.S. Congress would make stablecoins illegal unless they’re approved by the government, according to a report by Cointelegraph.
The bill text says it will be unlawful for people “to provide any stablecoin-related service, or otherwise engage in any stablecoin-related commercial activity, including activity involving stablecoins issued by other persons,” without the appropriate approval from the government.
However, as this Congress is set to expire in a month, the bill isn’t likely to gain traction.
Rohan Grey, an assistant professor at Willamette Law, tweeted that the bill is ultimately aimed at private stable tokens from large tech companies. However, it has been written in a way that could target a much wider range of activity and seems to be trying to stop the kind of large-scale shadow banking risk that pre-empted the 2008 financial crisis.
Congresswoman Rashida Tlaib, who led the charge on the bill, has echoed that sentiment.
“Preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color traditional big banks have is critically important,” she tweeted Wednesday (Dec. 2).
The crypto community has responded negatively, with CoinShares Chief Strategy Officer Meltem Demirors disputing Tlaib’s assertions regarding lower-income minority residents. Demirors said cryptocurrencies “lower the cost of servicing the populations that have historically been excluded from the banking sector.” She also said that the act would only serve to raise costs for crypto and thus shut out more people, Cointelegraph reported.
Jeremy Allaire, CEO of Circle Internet Financial, told PYMNTS that he expects to see as many as “billions” of people using stablecoins in the next few years. He said one major issue will be interoperable functionality, such as allowing people to use Venmo to pay someone who has Square Cash.