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Stablecoin companies have recently caught the attention of US lawmakers for various reasons. According to the debate, if all stablecoin projects are not brought under a regulatory umbrella, they could eventually weaken the dominance of the US dollar. Dante Disparte from Circle stated in an interview with CNBC in January that legislation targeting stablecoin projects needs to be addressed urgently because such illegal activities are bad for the US economy.
Stablecoin Legislation on the Agenda in the US
Timothy Massad, former chairman of the Commodity Futures Trading Commission and currently a researcher at Harvard University, recently expressed his concerns in an article:
“What provides the US with tremendous financial momentum is the role of US banks in facilitating dollar payments along with the dollar’s global dominance. Could stablecoin projects jeopardize this momentum?”
Massad and other experts worry that stablecoin projects and other cryptocurrencies, even if not subject to monitoring and accountability similar to the Bank Secrecy Act, could allow bad actors to circumvent US economic sanctions and ultimately disrupt the US’s economic and political policy goals.
Interestingly, Massad’s article was published on the same day US Senators Cynthia Lummis and Kirsten Gillibrand introduced the bipartisan Lummis-Gillibrand Stablecoin Payment Act, aimed at creating a regulatory framework for payment stablecoin projects.
Lummis’s press release states that the proposed law would promote the dominance of the US dollar while preserving the dual banking system. Meanwhile, author Maxine Waters announced on April 25th to Bloomberg that the latest version of the McHenry-Waters stablecoin bill, which has been under consideration in the US House of Representatives for some time, could soon be ready.
Prominent Figures Make Noteworthy Statements
Massad mentioned that the Lummis-Gillibrand bill represents a significant step forward in providing a regulatory framework for stablecoin projects, primarily subjecting issuers to the Bank Secrecy Act, which requires financial institutions to report suspicious activities. Kristin Smith, CEO of the Blockchain Association, commented on the matter:
“Effective stablecoin legislation will strengthen the global supremacy of the US dollar and foster the development of responsible crypto asset innovation within the country.”
Lummis and Gillibrand’s long-standing bipartisan approach to crypto asset regulation has been supported, adding:
“It is crucial for US regulators and Congress to recognize the market significance of stablecoin projects and to encourage future stablecoin innovations in the US through relevant legislation.”
