More regulations coming for stablecoins

Looks like stablecoin issuers are gonna have to start acting like traditional banks since US lawmakers now want them to get bank charters. This means pretty much all of them will fall under government oversight. What do you guys think? Is this a good thing?

Let's see how long it takes before they (try to) regulate ALL cryptocoins. Let's say these regulation attempts have actually been going on for a while now... Which is also a sign of the fact that some governments suddenly are starting to take crypto seriously. But since you've opened the thread, OP, why don't you share your opinion with us first?

BTW: US lawmakers do not require anything now, contrarily to what you posted. Atm the bill has only been introduced. Don't want to be a pain in the ass, but if you want to write about legal subjects, make sure you write accurately and precisely.

My opinion is that nothing good for crypto will come from that bill, just more regulation and control... yes sure it's for consumer protection of course.. https://tlaib.house.gov/media/press-releases/tlaib-garcia-and-lynch-stableact Yes it has only been introduced, but will be be passed next year which is in less than a month.

Positive for them but not for us. Stable coin themselves that are centralized can even freeze addresses. This means that they're good to go with the regulation of the government where they belong and most likely, US will control it. Even those controlled by known exchanges, GUSD and USDC once it becomes a law.

Ever since I knew that Stablecoins' issuers have the ability to freeze/reclaim their own cryptocurrency I know everything will be more controlled by the government. For those of you who don't know stablecoins like USDT have the ability to freeze someone's wallet in their own will, in this case if the government/authorities will ask them to handle some kind of "suspicious activity" they have the power to just control all of you stablecoins and instantly just wipe it. This is one of the negative things about cryptocurrencies being backed by fiat currency as definitely the country they have issued the fiat-backed crypto has some special powers within it.

I wonder about how they plan to regulate foreign stablecoins, such as USDT, and how they plan to control how U.S. customers use them. I guess they have some leverage because they can control access to USD, but I am curious about how that might work.

The only way that these attempts can't succeed is P2P trading or meet ups to buy the coin. It is a sad thing that crypto companies are still companies after all, they do not want to change the system, they know that it is broken and getting in would be the best thing. There are good things about it though, with them tied to central authority, money laundering and terrorist fundings will be almost impossible, besides that there isn't much to like about it.

Yes i think this is a very positive move that stable coins are getting more regulated. Regulation leads to legitimacy of crypto so the more that banks and law makers become involved, the better it is for all of us.

Legitimacy by whom? who set the so called legitimacy. Aren't they the same characters who want everyone to remain slaves of fiat and the system?

IMO, no government around the world will let it happened that they will lose control over the finances of their citizens which I'm afraid that soon they will try everything to make stablecoins centralized just like the fiat did, not by itself but the holders on it through using the custodial wallet and be under their jurisdiction similar to the fiat currencies. With OP's question, I tend to agree that in the soonest possible time the proposed bill will be passed, for the governments are aware of the increasing number of people who are investing or using in stablecoin now and they are starting to lose information on the exact assets and liabilities of their citizens especially for those who are in the government.  If the bill will be passed definitely it will bring no good for they just want to extend their powers on everything under the sun as well in the crypto world.

Why do governments and their master bankers get to hold monopoly over finances? Who gave them that right over us? Trade is what is accepted between two parties. I can trade your work for donuts if you liked donuts enough. It is absolutely mind bending that governments think they can invade every faucet of life all the way from health to finances.

And they deserve to be. They are essentially deposit taking institutions that issue out tokens as a receipt of deposit. The legal loopholes that allowed them to exist without much reserve requirement was particularly dangerous. I remember USDT started announcing that they were no longer 100% backed by fiat (as they wanted to invest into assets that brought them a profit). Without a centralised system of deposit insurance, a "run" is sure to happen with such loose standards. Note though that this is entirely different from decentralised cryptos which have no obligations to redeem tokens for a certain underlying asset, which is why the regulations should be entirely different for these two asset classes.

I think so. As pointed out by magneto, stablecoins are a different banana. They are unlike other cryptocurrencies such as Bitcoin. Therefore, they should be dealt with differently. Private companies should not be allowed to just create digital versions of fiat currencies out of thin air. Stablecoins are supposed to be nothing but digital representations of the fiat currency on which their value is pegged. There should, therefore, be a strict regulation to make sure the assets of these tokens are truly present and kept intact and in the amount equivalent to the tokens they issued.

I think that's inevitable if you think about it. If you manage to make more and more people accept cryptocurrency and people are looking for more ways to obtain them, regular banks are at the financial institutions' front. Nothing is completely wrong with them letting control it as long as you are using it the right way, you wouldn't be worried. Having that defined powers by banks would open new people to the idea that it's actually the big thing and maybe have more people invest in it. Win-win.

How would they regulate or rather freeze stablecoins like DAI? In another news, Facebook's Libra is now making its way as DIEM.

in theory, regulators could go after the centralized custodians backing DAI's collateral. after all, the majority of collateral backing DAI's value is held in centralized assets like USDC, WBTC, TUSD, PAX, etc. if regulators make it untenable for custodians to provide highly liquid stablecoins to back DAI, then it's a return to death by ETH volatility. https://www.longhash.com/en/news/3339/MakerDAO%E2%80%99s-in-Trouble-%E2%80%94-And-It-Could-Shake-Up-DeFi thanks for the heads up. they're planning to launch next month! https://www.coindesk.com/facebook-libra-stablecoin-january-2021 and it's a dollar-pegged stablecoin. i have a feeling USA crypto/stablecoin regulation will be passed very soon.

It is inevitable for sure but it's not about the utility of the stablecoins itself because if we are talking about the "utility" alone then for sure Bitcoin will be more regulated as compared to stablecoins, because tbh stablecoins are mostly used in exchanges rather than in any kind of platform. So right now the only thing making them having stricter regulation is because they are holding the fiat currency of the US which I think gives US have the right to add in their restrictions to protect their own fiat currency.

Total Agree with this guy, because lot of stable coin using bank to collateral their money like i see on USDT using 2 bank as the main collateral and those bank can be freeze by the Government its different with stable coin using algorithm and anyway government is try regulate anything

DAI Shouldn't have allowed centralized stable coins as collateral in the first place. It should have only been backed by ethereum.