Stablecoins Face US Scrutiny as House Lawmakers Craft Rules (bloomberg.com) 39
US lawmakers' efforts to police stablecoins are gaining steam, with a key House committee preparing to consider a plan for imposing new rules as soon as next week. From a report: Leaders of the House Financial Services Committee are eyeing July 27 to advance a bipartisan bill focused on the digital tokens, according to three people with knowledge of the proposal who asked not to be named discussing the panel's plans. Maxine Waters, a California Democrat, and Patrick McHenry, a Republican from North Carolina, have said they're working together to create guardrails for stablecoins, crypto assets that are typically designed to be pegged to the US dollar or other traditional currencies. The current draft of the bill would mandate that stablecoin issuers maintain 100% reserves and bar them from lending stablecoins to customers, according to multiple people with knowledge of the bill text. Stablecoins would be known as "payment stablecoins" under the legislation, and bank and non-bank issuers would operate under the same regulations. The Federal Reserve would license any non-bank stablecoin issuers and would be responsible for monitoring those firms' financial health, according to the people.
If you have a cryptocoin pegged to the $ (Score:1)
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Because ALGORITHM!
*tapdance*
Re: If you have a cryptocoin pegged to the $ (Score:1)
As long as no one actually forces you to count them ....
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It's no different than arcade coins matching a quarter. You're trading your quarters for arcade coins, i.e. tokens. This seems the same except in the digital sense.
You aren't "making" money because you will never have more money than what people trade you. Stablecoins are uninsured vouchers, and suckers are buying them. I have no problem if that's what someone wants to do with their money. Similarly, if an arcade goes out of business, I don't care if someone is stuck with all these useless arcade coins.
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The arcade coin serves multiple purposes:
* It allows the arcade to easily change the price of a game without having to change the machines,
* Sale lock in - by pre-buying games, you are probably going to overestimate how many games you really want to play, which will tend to make them spend more than they otherwise would.
* You are also more likely to drop another token in a machine as its value is more abstract than having to break another note for more coins.
* The arcade doesn't have to haul bags of $1 coin
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You aren't "making" money because you will never have more money than what people trade you.
Oh, you sweet summer child...
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Stablecoins still are just as much of a pain in the ass to deal with as any other form of cryptocurrency, with the added benefit that the company behind them could implode and your coins could end up completely worthless. At least with decentralized cryptocurrencies, the value is subject to the will of the mob (you can lose value, but you probably won't lose all of your value).
Really, the only point of stablecoins is so the issuing companies can do shady shit with them for as long as they can get away with
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Agreed. These are all reasons to just use the dollar, or maybe the euro, since backing transfers are far easier in the EU zone than they are in the US.
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Stable coins transactions are not as trivial to track as bank transactions. So it becomes less obvious if people are selling illegal products. Not as good as traditional cash, but can be done remotely.
Re: Why dollar-pegged stablecoins? (Score:2)
That's why.
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Automated or rapid computerized exchange etc. That's why.
Why not just do that with regular money?
Like we've already been doing...
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I guess theoretically the present day financial infrastructure could get its act together without cryptocurrency and smart contracts, but
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Re:If you have a cryptocoin pegged to the $ (Score:4, Interesting)
It makes sense because moving fiat to crypto (and vice-versa) is costly or inconvenient because you have to interact with the traditional systems. The crypto world has its own ways of doing currency exchange. The whole idea is to avoid the status quo; but then they realized the status quo is how everybody thinks. The stablecoin is their effort to have the best of both worlds--a familiar reference point, and an exchange system they control.
The problem is in status quo (Score:3, Insightful)
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The whole idea is to avoid the status quo
The whole idea is to avoid costly regulations.
Assuming they're not just outright scams.
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Because Americans can't seem to come up with a reasonable electronic payment system. Most likely because their banks don't want to and capitalism baby.
USA bank transfers (Score:2)
Does the USA still not have a facility where anyone with internet banking can send anyone else money, directly, bank to bank?
That used to be the case, which is where Paypal came from.
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Well, you can do a wire transfer. Other than that, as far as I'm aware, nope.
Stablecoins (Score:2)
"Stablecoins" has got to be the most brazen con I've ever heard of. It is self-proclaimed to be stable, because it's right there in the name, so just buy it and treat it like it's a AAA-rated blue chip.
Re: Stablecoins (Score:1)
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Without being a government.
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So, if someone trades their quarters for arcade coins, then are is that arcade also printing money? This is the same thing except its track digitally.
Stablecoin is not an insured voucher, therefore you are not printing money. If an arcade goes out of business, you're stuck with useless arcade coins. You can't use them as money. This is exactly like stablecoin. If exchange systems stop taking your stablecoin "voucher", well, your loss. You are stuck.
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They have been allowed to literally print counterfeit money and use it as if it were real. Hundreds of billions. The price of anything will skyrocket if multiple people are allowed to bid on it using fake money and that's exactly what has happened in the crypto world. The pain hasn't even started yet.
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"Stablecoins" has got to be the most brazen con I've ever heard of.
Actually it's nothing new. Banks started out swapping real money for IOUs and that scheme worked fine until it didn't. Stablecoins are just new tech used for old fashioned bad dealings.
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US Regulators (Score:2)
Most if not all cryptocurrency projects are international/global. Surely US regulators can only regulate US users' use of such things, or exchanges etc. which operate in the US.
They talk as if they are regulating the world use of crypto.
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Sounds like criminal or war-like behaviour on the part of a nation-state.
It would only be good news if you were opposed to cryptocurrency and decentralized finance in general.
And frankly I'm surprised you are using the interwebs at all to post your opinion if you are that luddite.
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They can regulate US users. Which is to say, they can just prevent US users from using it. Almost every crypto project wants to do business with US citizens.
Wow.... (Score:2)
Maxine Waters is one of the people on this committee? I'm sorry, but that woman seems IQ challenged enough so I wouldn't trust her to have a clue about anything related to financial regulations for a crypto-currency!
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If it looks like a scam, smells like a scam, and quacks like a scam, you don't have to be a blockchain expert to call it a scam.
Stablecoins are what Orwell... (Score:2)
paid his proofreader.
Why are they called stablecoins? (Score:2)
'cause congress closes the stable after the horse has long bailed?