The STABLE Act Is Bad News For Stablecoins

Plus some interesting news from the S&P Dow Jones Indices

Happy Thursday, Blockfolians

The Lede

Yesterday afternoon, a group of Congressional Democrats released the STABLE Act, an 18-page bill that would force stablecoin issuers to be, for all intents and purposes, banks. They would have to get banking licenses, be approved by the Federal Reserve and hold FDIC insurance.

The stated goal is to avoid predatory behavior and protect low income communities in times of COVID-19. Many in the crypto industry pointed out that hyper regulatory burden tends to have the opposite effect, crowding out all but the largest players who can afford massive compliance costs. It is exactly those companies that have the least incentive to actually serve low income customers.

It also brought up question of whether decentralized stablecoins would fair better under this potential regime, the answer to which seemed to be “no” according to one of the bill’s advisors.

While this bill might not get much traction, it is a signal for what the crypto industry will face in the years ahead.

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Highly Relevant Reading

  • S&P Dow Jones Indicies launching crypto indexes in 2021

  • Paul Tudor Jones says bitcoin is undervalued relative to gold

  • Positive results for a Swiss CBDC trial

  • The SEC’s FinHub is becoming a standalone office


Community Commentary

Seriously, this is an important conversation.
This is already starting - at least on the regulatory level.

A Really Big Number We Should Be Paying Attention To

$486,000

That’s the amount of value bitcoin moves around every second.


Final Thought

Truly epic.