Michigan Democrat Rashida Tlaib, along with Congressmen Jesus García and Stephen Lynch introduced a new bill today to protect consumers from risks associated with the growing cryptocurrency market in the US. The new bill seeks to make stablecoins illegal without approvals from relevant government bodies.
Dubbed ‘Stablecoin Tethering and Bank Licensing Enforcement’ (STABLE) Act, the new bill requires the potential issuer of a stablecoin to gain approvals from the FED, Federal Deposit Insurance Corporation (FDIC) and relevant banking bodies.
According to the official press release, any person involved in the issuance of a stablecoin or related product without the written approvals from regulatory authorities will be considered illegal. The proposed Act aims to protect US consumers from cryptocurrency scams and the risks associated with such projects.
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“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. 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. I thank Congressman García and Chairman Lynch for co-leading this important effort to see these protections made a reality,” the Congresswoman said in a statement.
In the issued statement, Tlaib targeted Facebook’s Diem project (Libra) which is pegged with the US Dollar. The Michigan Democrat added that Facebook has tried to take advantage of a potential gap in the market, but there are many risks associated with the project. Tlaib along with Lynch sent a letter earlier in November to the Acting Comptroller of the Currency (OCC) Brian Brooks criticising the unilateral actions in the digital financial activities space, including interpretive letters on cryptocurrency custody and stablecoins.
The Crypto community expressed disappointment over the bill and termed the Act as a discouraging step.