Stablecoins will be regulated in the same way as financial assets
The DeFi market will grow due to the hype around it
The draft law on cryptocurrencies will force the Russian market to go into the shadows
USDT vs USDC vs DAI – Which stablecoin should YOU use in 2021?
International consortium of news organizations developing transparency standards.
Most recently, the FATF stated that stablecoins pose a threat to the global economy and fiat money, and therefore should be regulated at the same level as cryptocurrencies. Now, stablecoin users will be required to go through the KYC procedure, and banks and exchanges will have to track stablecoin transactions. How FATF policy will affect the stablecoin market, BeInCrypto discussed with IEX CEO Igor Snizhko.
Top Stablecoins Compared Side by Side
– Most recently, the FATF announced that the stablecoin market should be regulated in the same way as the cryptocurrency market. How this will affect the development of stablecoins?
I.S.: In fact, the FATF stated that stablecoins should be regulated like traditional financial products. Stablecoin issuers will be forced to follow AML / CFT procedures.
But since people go to stablecoins first of all for privacy and anonymity, stablecoins with AML and identification will not be interesting to anyone. Therefore, issuers of stablecoins will find a balance between FATF requirements and business interests, just like cryptocurrency exchanges have done now. With all the KYC / AML requirements on the largest exchange Binance, you can still work without verification with a deposit of up to 2 BTC.
– Exchanges, banks and other organizations that use stablecoins must introduce a mandatory KYC procedure, as well as monitor transactions. How will this affect the work of organizations?
I.S.: Banks do not work with stablecoins, and crypto exchanges, according to the FATF requirements, must now identify customers, like in a bank, and track transactions. But when mandatory verification was introduced on LocalBitcoins, the turnover dropped three times, which means that customers are not interested in cryptocurrencies without anonymity. Therefore, crypto exchanges find a balance between FATF requirements and business interests, in this situation they will do the same.
– Is this the way the governments of the countries are trying to take control of the circulation of stablecoins, or is this a necessary measure?
IS.: Of course, any government will be against the circulation in its territory of monetary units that it does not control, and this is one of the reasons why everyone is so up in arms against Libra In June 2019, Facebook announced preparations for the release of the digital currency Libra. The social networking project immediately attracted attention … More. And we would gladly ban both stablecoins and cryptocurrencies in general.
But, since both cryptocurrencies and stablecoins are already an objective reality and in the event of a ban in certain countries they will simply go into the shadows, the state, represented by financial monitoring bodies, is trying to bring the degree of control in these new instruments closer to that which is in traditional finance.
– If stablecoins are regulated like a cryptocurrency, what will happen to Tether, Libra and others??
I.S .: Cryptocurrency is now regulated in individual countries and purely nominally. Those who want to use it anonymously have every opportunity to do so. I think that attempts to regulate stablecoins will have the same result.
Tether will say it will comply with all requirements and will continue to operate as it is bought and sold through a variety of intermediaries around the world. Officially, everything will be as it should be, but in fact, as convenient, and as it is happening now.
Libra launch depends on the position of the American regulator. This issue is being considered for the second year.
– How control over stablecoins will affect the DeFi marketDecentralized finance (DeFi) is a financial service built on blockchain technology that offers users access to an open, efficient and … More?
I.S .: As I said, I think that attempts to control stablecoins are declarative and will not be crowned with success. The DeFi market will grow because there is a hype around it, and because loans secured by credit will always be in demand. Both for the consumer and for all kinds of financial schemes.
– Will CBDC be regulated? Bills and coins may be a thing of the past due to a new financial instrument – Central Banks Digital Currencies (CBDC). As … More on the same principle as stablecoins and cryptocurrencies, or coins of central banks will be regulated like fiat money?
I.S .: CBDC will be regulated like fiat money, the central banks are unlikely to allow anything else. Will be in demand mainly by business.
What Will Happen to Stable Coins If USD Collapses?
– China, Germany, France and a number of other countries are already working on the creation of a CBDC. Is it possible to launch a crypto-ruble or digital ruble in Russia or is it unlikely??
I.S.: Considering the draft law “On digital financial assets”, the general mood of the legislators in the Russian Federation hardly admits such a possibility .
– How the stablecoin market will develop in Russia?
I.S.: The same as the crypto market in general. If the bill “On digital financial assets” is passed, everything will go into the shadows. If it is revised and is closer to the Belarusian version, this market in the Russian Federation can grow and develop.
– Thanks for the conversation!
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