Yesterday, a new U.S. bill aimed at regulating stablecoins was introduced by Congresswoman Rashida Tlaib, Congressmen Jesús “Chuy” García, and the Task Force on Financial Technology Chairman, Rep. Stephen Lynch. The Stablecoin Tethering and Bank Licensing Enforcement Act (STABLE) would amend the current Federal Deposit Insurance Act, to regulate stablecoin issuance and other commercial activities.
Congresswoman Tlaib is particularly concerned that during COVID-19, the underbanked could turn to alternative financing routes out of desperation and wants to prevent their exploitation. She specifically mentioned Facebook’s Diem (formerly Libra) and said that JP Morgan, Apple, and Paypal have considered issuing stablecoins. Diem insiders are hopeful of a January launch, but the Apple and Paypal comments are news.
“Getting ahead of the curve on preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that traditional big banks have is- and has been- critically important,” said Congresswoman Tlaib. “From the OCC to the Federal Reserve to those peddling stablecoins the protections the STABLE Act would make possible are more needed than ever amid a pandemic that will breed riskier financial decisions out of necessity because our federal government continues to fail us all by not providing adequate relief legislation.”
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