About Regulation of the Stablecoins Market


There’s a bill in the US Congress to regulate the production and use of stablecoins.

When the first stablecoins appeared, this caused some confusion among financiers: it was like surrogate money and had serious signs of fraud. Imagine, someone put out a piece of paper and said it was worth the dollar. 


Theoretically, the entire volume of issued stablecoins can be secured by assets equal in value to their face value. The issue is the quality of these assets.




Initially, the main task of the stablecoins was to organize a "bridge" between cryptocurrencies and the fiat. After efficiency which was shown up by stablecoins on crypto exchanges, and the infrastructure for their quick exchange for fiats appeared, the application options expanded considerably.


In Latin America, which suffers from inflation, the USDT is quite successful as an alternative to national currencies, and is used in various trades.


This situation should have been of interest to the American authorities. In fact, they ran the risk of a latent dollar issue, which is, of course, an unacceptable risk for any state.


And here comes a bill that regulates all that is stablecoins related. What should be noted:

It is proposed to ban unsecured "algorithmic" stablecoins. You’re going to release a dollar-denominated crypto - put 100% collateral. The low-quality security will not work - all businesses will be supervised by the SEC and the Commodity Futures Trading Commission (CFTC). And it is proposed to put the main load on the CFTC. And what about the SEC? We come to the second interesting point. The fact is that stablecoins are not recognized as securities, which deprives the SEC of freedom of maneuver. In itself, it’s an achievement.


The bill is not unanimously approved by Congress. US Senator Elizabeth Warren proposed to solve the problem in a radical way - simply ban stablecoins.


We look forward to continuing.


#StablecoinRegulation #CryptoCompliance #FinancialSecurity #RegulateStablecoins #CryptocurrencyLegislation

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