The planned StableCoin law in the USA ensures heated debates: critics warn of “privatization of the dollar”, while supporters see it as a necessary step for promoting innovation and maintaining the dollar dominance.
• Genius law should regulate stablecoin in the USA
• Critics see the risk of privatization of the dollar
• Consumer protection and financial stability are also poor
The genius law, which was introduced by the Republican Senator Bill Hagerty and the democrat Kirsten Gillibrand, provides a dual regulation for stable coin emitters. Stable coins are cryptocurrencies that are bound to Fiat currencies such as the US dollar and are currently mainly used in crypto trading. The law would enable issuers to either contact state or federal supervisory authorities. In addition, StableCoin issuers are to be obliged to keep a one-to-one reserve. In the United States, the planned genius law to regulate stable coins ensures controversial discussions.
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StableCoin law in sight: concerns of the critics
Elizabeth Warren, democratic senator and well-known crypto skeptic, warns of the possible consequences of the law in an analysis that she provided to her democratic colleagues and shared with Marketwatch. “Under this law could Elon Musk Introduce ‘X Money’ tomorrow and transform social media into a payment empire – with little supervision. We see the potential privatization of the dollar here, “said Warren. She fears that Big Tech could take control of the financial system, which would endanger the independence of the US dollar.
Senator Gillibrand defends the law: promotion of innovation?
However, opponents of Warren argue that their warnings are exaggerated. Senator Gillibrand rejected the concerns and emphasizes that the law is “decisive for the maintenance of the dominance of the US dollar, the promotion of responsible innovation and the protection of consumers”. According to her, the legislative initiative is necessary to counter the competition through foreign stable coins and digital currencies and to ensure the international influence of the US dollar.
Another central point that Gillibrand emphasizes is the creation of a clear regulatory framework that is intended to enable safe and transparent use of stable coins without suffocating the innovative strength of the industry.
Critics criticize consumer protection and financial stability
However, critics also criticize the lack of consumer protection in the law, since stable coin emitters are not subject to the same regulations as banks or payment services. Jai Massari, Chief Legal Officer at Lightspark, explains according to Marketwatch: “The focus of the stable coin regulation should be that they are used for payments, and we have historically not regulated payment intermediaries like banks.”
The financial effects of the law are still difficult to estimate, but experts fear that it could lead to a destabilized financial landscape. Adam Levitin, an expert on insolvency law at Georgetown University, warns that the creation of a new framework of regulatory framework could be held responsible for any problem in the market. “By creating a regulatory system for stable coins, the federal government becomes an” own “,” wrote Levitin in a recently published blog post. “It creates a situation in which the government has to deliver security, otherwise at its own expense. In other words, it prepares the soil for a rescue operation.”
Crypto regulation: A law with far-reaching consequences
The genius law could have a significant impact on the US economy and the global financial system. While supporters consider it necessary for the competition and the promotion of innovation, critics warn of a danger to the stability of the US dollar. The upcoming debate in the US Senate could be decisive for the future of stablecoins and financial regulation in the United States.
Editor finance.net
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