Below is the 04/24 Update. Original published April 23, 2019.
Bitcoin Bitcoin The latest supply reduction has been halved. Crypto “chaos” “unprecedented.”
Subscribe Now Forbes’ CryptoAsset & Blockchain Advisor After the halving of Bitcoin, “Uncover Blockchain Blockbusters” poised to gain 1,000% or more!
Bitcoin price has soared over 300% from its low of $15,000 in late 2022 to the highs of 2024. Even as the fears of an “rapid and cataclysmic collapse” in the U.S. Dollar are escalating.
Now, As traders wager on China’s potential to cause another Bitcoin price earthquakeOne expert called the new bill, which regulates dollar-pegged cryptos and is introduced by two U.S. Senators to Congress a “huge disaster”.
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The stablecoin legislation, which is 179 pages long, was introduced by Senators Cynthia Lummis (R-Wyo.) and Kirsten Gilibrand (D-N.Y.), last week. It would establish “clear road rules” for stablecoin issues like Circle and Tether. Tether Analysts at TD Cowen, an investment bank, believe that the move could trigger a wave of mergers between banks and issuers.
Stablecoins are dominated by USDC and USDT, Tether’s USDT. USDC In recent years, the market for has grown to $160 billion. Stablecoins pegged to the dollar have become a popular way to move money internationally and access offshore crypto exchanges, which are not able to work with U.S. bank accounts.
Update 04/24: According to Andrew O’Neill of S&P Global’s Digital Assets Research Lab, the Lummis and Gillibrand Stablecoin Act could “accelerate’ a move towards on-chain payment and tokenization.
O’Neill, in an email, wrote that “Stablecoins can be used as a key component of the financial market’s blockchain adoption, by acting as a currency digital for on-chain payment, which promises efficiencies and improved settlement security. This is achieved through tokenization and digital bond issue.”
BlackRock, the largest asset manager in the world revealed last month that it has already started the second phase of its “revolution” in the financial markets based on crypto with its BlackRock USD institution digital liquidity fund.Citi analysts have predicted that a market worth $5 trillion could be created by 2030.
“Investment group BlackRock’s BlackRock Buidl Fund is a good example of a new use. This tokenized fund uses the Ethereum blockchain to invest in U.S. Treasury bonds. It has a USDC stablecoin liquidity pool, where investors can instantly redeem their share tokens through a smart contract.
In a report, the TD Cowen Washington Research Group led by Jaret Sieberg wrote that the bill would “be symbolically important for crypto as it would represent the first constructive legislation on crypto from Congress.” seen By: The Block.
The group stated that if this strategy is implemented, it may lead to a merger between stablecoin issuers and banks. Issuers would want to have the benefits of a banking institution and a new bank looking to get involved in stablecoins might want to take advantage of the existing user base.
This bill is the latest attempt to pass stablecoin legislation in Congress. It would require that companies that issue coins hold reserves of cash equivalent to or equal to one dollar to support their coin.
The bill would also prohibit algorithmic stablecoins and prevent stablecoins from being used for illegal purposes such as money laundering. It would assign chartering and enforcement authority to state and federal agencies.
Lummis referred to the bill as “the most comprehensive bill on stablecoins” because it would allow for Federal Deposit Insurance Corporation conservatorship in case an issuer of stablecoins becomes bankrupt.
Lummis said that the bipartisan solution was crucial to maintaining U.S. dominance in the financial world and ensuring the U.S. remained the leader of the global market in terms of innovation.
Gillibrand said, “It is designed to protect consumers, by requiring one-to-1 reserves, banning algorithmic stablecoins and requiring stablecoin issues to adhere with U.S. Anti-Money Laundering and Sanctions Rules.”
Some critics have come from the world of traditional finance as well as the crypto-space.
Hilary Allen is an Associate Professor at the Washington College of Law of American University. Tell them to get on with it BloombergStablecoins, they argue, are not robust enough to serve as a form of payment.
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In a recent blog, Jerry Brito wrote about his role as executive director at Coin Center. Post by The proposed legislation “stifles Innovation and violates First Amendment Rights by banning all algorithms.”
Jonathan Padilla of Snickerdoodle Labs who previously worked for PayPal, has a different view. Paypal Paypal Stablecoin has appointed its Head of Blockchain Strategy until June 2021. Tell them to get on with it DLNews It is unlikely that a bill of this nature will be passed by Congress before next year.
The need for stablecoin legislation may soon rise to the top of the list. Venezuelan state-run PDVSA has turned to cryptocurrency in order to avoid U.S. sanctions against the country. Reuters reportedCiting anonymous sources. PDVSA began moving its oil sales into Tether’s dollar-linked USDT stablecoin last year.
You can also find out more about the following: Wall Street Journal Reports Anonymous sources claim that the U.S. has been drafting new sanctions to cut off some Chinese banks from the global banking system. This would dent China-Russian trade, allowing Moscow to rebuild their military following losses in Ukraine.