Some of the experts heard in the US Congress proposed to tighten regulation of stablecoins, while others supported the introduction of a law that would favor the development of the market.
Alexis Goldstein, professor at the American University of Washington College of Law, speaking before the US Senate Banking, Housing and Urban Affairs Committee, in a written report
expressed concern that DeFi projects have not passed KYC and AML compliance checks. Therefore, stablecoins can be used to launder money obtained as a result of cyber extortion. It is important that the issuers of stablecoins conduct their activities in accordance with the legislation. In this case, it is not at all necessary to require that they be insured by depository banks, she told Congress.
Open Markets Chief Financial Officer Jai Massari
expressed the opinion that companies are able to prevent the risks of short-term provision of stablecoins with liquid assets. She is confident that the issuers of stablecoins should be required to ensure that the market value of the backing reserves is not less than the nominal value of the tokens in circulation.
“A new and well thought out law could accommodate a business model based on the issuance of stablecoins, fully backed by short-term liquid assets. This charter may impose requirements on the composition of reserve assets when adapting leverage ratios or risk-based capital requirements and other requirements for the nature of the business model. This can insulate the issuer of stablecoins from more risky activities in order to minimize other requirements for reserve assets. ”
However, Circle Director of Strategy and Global Policy Leader Dante Disparte, in his report
noted the benefits of using stablecoins and urged legislators to change their approach to regulating stablecoins. In his opinion, the priority for legislators should be the desire to “do no harm” and encourage innovation.
“I affirm that we are winning the cryptocurrency race thanks to the collection of free market activities within the perimeter that regulates cryptocurrencies and blockchain-based financial services.
In his view, the combination of these actions promotes the broad US economic competitiveness and national security interests.
Hearings in the US Congress have confirmed the fact that there is no consensus on the regulation of stablecoins. In October, Sherrod Brown, Chair of the US Senate Banking Committee, demanded clarification on how stablecoins work. In December, US Treasury Secretary Janet Yellen said stablecoins require proper regulation. Minnesota Republican Tom Emmer and Connecticut Democrat Jim Himes recently opposed stringent requirements for stablecoin issuers.
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