Washington Debates Cryptocurrency Rules, With Sights Set on Stablecoins (wsj.com) 29
As Washington attempts to get its arms around the rapidly growing cryptocurrency industry, policy makers in the Biden administration and on Capitol Hill have identified stablecoins as an initial target for tighter regulation. From a report: Often billed as one-to-one representations of a currency like the dollar, stablecoins have recently exploded in popularity as investors use them for trading other cryptocurrencies. There are dozens of stablecoins, though a handful pegged to the dollar account for most of the market value, which grew roughly 500% in the 12 months ending in October, according to a report from the Biden administration.
Both Democrats and Republicans want to create new safeguards to help ensure that one stablecoin is quickly redeemable for one dollar, while at the same time warding off broader risk to financial markets. But despite bipartisan agreement about the need for new federal action on stablecoins, policy makers remain at odds about how and when to take it. The Biden administration is asking lawmakers to pass legislation that would treat stablecoin issuers like banks, a step that Republicans and some Democrats oppose in favor of a lighter statutory touch. Other Democrats are skeptical of compromising with Republicans on the issue at all, instead pushing the Biden administration to take more aggressive steps itself. How -- and if -- Congress resolves the debate over the roughly $185 billion stablecoin market is an early test of whether Washington will ultimately write new laws or wield existing frameworks to regulate the broader $2 trillion cryptocurrency industry.
Both Democrats and Republicans want to create new safeguards to help ensure that one stablecoin is quickly redeemable for one dollar, while at the same time warding off broader risk to financial markets. But despite bipartisan agreement about the need for new federal action on stablecoins, policy makers remain at odds about how and when to take it. The Biden administration is asking lawmakers to pass legislation that would treat stablecoin issuers like banks, a step that Republicans and some Democrats oppose in favor of a lighter statutory touch. Other Democrats are skeptical of compromising with Republicans on the issue at all, instead pushing the Biden administration to take more aggressive steps itself. How -- and if -- Congress resolves the debate over the roughly $185 billion stablecoin market is an early test of whether Washington will ultimately write new laws or wield existing frameworks to regulate the broader $2 trillion cryptocurrency industry.
Re: The grand master plan of crypto (Score:2)
Simple Test (Score:2, Flamebait)
The crypto-coins will be real when they invite regulation. Inviting regulation raises confidence of potential investors, merchants, and consumers. Inviting regulation also creates a barrier to entry for any new business rivals in the space.
The crypto-coins will be entirely real when the mechanisms to tax transactions and gains is enacted.
“If it moves, tax it. If it keeps moving, regulate it.” -- Ronald Reagan, slightly out of context but amusing
Re: (Score:2)
Why would you think that a transaction using crypto doesn't have sales tax attached to it, just like any other transaction?
Re: (Score:1)
Is it 2014? Are we still talking about SJWs?
Grow up man, we're onto new and different things to be fake outraged about.
Some quick definitions (Score:5, Informative)
For those not into cryptocurrency, I have made this handy glossary:
Cryptocurrency: Some numbers that you'll be able to sell to the next sucker
NFT: A receipt that certifies that you paid for some numbers, the next sucker can verify that at one point you paid for the numbers
Proof of work: Destroy the environment to create the numbers
Proof of stake: The rich get richer, if you already have numbers then you get more numbers for having the numbers
and relevant to this discussion:
Stablecoin: Really expensive and illiquid dollars
Re: (Score:1)
While I can appreciate the knee jerk reaction to cryptocurrency, take a breath and consider:
Plain old money, or currency, is just a bunch of numbers. It's not tied to anything stable and the vast majority of transactions are nothing more than an exchange of numbers; you use a credit card, debit card, PayPal, Apple Pay, and on and on to facilitate exchanging a bunch of numbers backed by the full faith and credit of ... hmmm ... that's disturbing.
Ironically the number of Bitcoins available is far more stable
Re: (Score:1)
In many ways it's analagous to the old gold standard, the only way to increase availability is to mine it, although it's done computationally rather than dug out of the ground.
That's not a very good analogy.
Gold production is limited by the scarcity of the resource itself, and the amount of labor devoted to finding and mining it.
Bitcoin is algorithmically designed to produce a block reward at regular intervals, regardless of the amount of "labor" devoted to mining. In fact, if all but a single miner decided to shut down their rigs, there would still be exactly the same amount of new Bitcoin produced. Proof-of-work is utilized solely as a means of securing the blockchain against
Regulation will eventually make it pointless (Score:1)
The government is getting better every day at tracing who is trading cryptocurrency. With that comes the ability to regulate and prosecute. Governments canâ(TM)t stand unregulated currencies they donâ(TM)t control, so the regulation will eventually eat away all of the unregulated aspects turning them into just another tangible asset like gold. Any use the doesnâ(TM)t conform to those regulations will be outlawed and prosecuted. So by definition the only users of unregulated currencies will be
185 gigadollars of stablecoins? (Score:2)
I simply refuse to believe that real people, with real assets, have tied up hundreds of billions of dollars of value in stablecoins. Prove it. Maybe I'm old and lack vision, but it seems to me that we have really effective stablecoins a
Stablecoins like Tether (Score:2)
Pirate Chain: Permanently immune to regulation BS (Score:1)