Republicans Slowing Down Legislation On Stablecoin
The Senate Banking Committee is now debating how to respond to the administration’s demand for stablecoin regulation; nevertheless, there is a significant party division about this issue.
The Democrats on the Senate Banking Committee are concerned their Republican counterparts do not give the potential dangers posed by cryptocurrencies the attention and consideration they need.
In a chat with The Block, the committee chairman, Democrat Sherrod Brown of Ohio, said that “their entire caucus are crypto supporters. They have a callous attitude about the danger that cryptocurrencies present. The unregulated sector makes it difficult to ascertain how several billionaires make their wealth thereby giving way for fraudulent activities.”
Chairman Of The Committee Calls For Regulation Of Stablecoins
Brown further stated that the recent drop in the value of the Terra USD’s peg “reaffirms the significance of this danger to the financial sector, since it is uncontrolled.”
Senator Elizabeth Warren, a prominent opponent of the cryptocurrency business who serves on the Committee, stated;
“We are going to have to address the dangers that stablecoins provide to customers as well as to the U.S. economy as a whole. Suppose they are not being appropriately supervised, and they are falsely claiming to have security when in reality, they do not. In that case, this poses a threat to the whole monetary and financial system.”
During a hearing held by the Committee on the 10th of May, Nevada Democratic Senator Catherine Masto stated, “We certainly need a set of regulations for stablecoins. The market for cryptocurrencies has grown to the point that it is now greater than the market for subprime mortgages, which was the primary cause of the global financial catastrophe.”
Concerning the resolution, there is no clear path forward at this time. In the House of Reps, Rep Josh Gottheimer has proposed measures that would basically legalize the stablecoin policy that the Biden administration sought. However, the Senate has not heard similar suggestions come from Republican members.
“I am aware that our inability to enact any legislation is directly attributable to the presence of a crypto lobby in this body. It does not imply that we are not attempting to pass legislation. On the other hand, we are able to collaborate with the Fed, CFTC , the SEC, the FDIC, the Ag Committee. As well as the OCC,” continued Brown.
The recent fall in the price of Terra’s LUNA which many alleged was caused by market manipulation has reaffirmed the need for regulation of stablecoins. Several investors who were unable to cash out before the fall have lost millions of dollars.