White House prepares restrictions for stablecoins

CONTENT

  • US prepares to tighten rules for the circulation of stablecoins

  • Stablecoin issuers must be willing to pay damages in a 1: 1 ratio

  • Europe wants to introduce a number of restrictions on the circulation of stablecoins

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White House may impose restrictions on the use of stablecoins under the pretext of combating money laundering and financial terrorism.

The US government wants to control the circulation of stablecoins

The working group on financial regulation under the US Treasury has proposed tightening control over the circulation of stablecoins, citing the fact that these coins may pose a threat to monetary stability. The authors of the document refer to the FATF and FinCEN recommendations regarding cryptocurrencies, including stablecoins pegged to the US dollar.

Here are just a few new rules that will come into force this year:

  • registration of the issuer in the Financial Crimes Network (FinCEN);
  • developing, implementing and maintaining an effective program to combat money laundering;
  • compliance with accounting and reporting requirements, including reporting of suspicious activity;
  • development and implementation of individual sanctions based on compliance programs.

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Special attention is paid to protecting the rights of stablecoin holders. As stated in the document, issuers of stablecoins must have a reserve of fiat currency in order to exchange stablecoins for US dollars or another currency in case of an unforeseen situation, at a rate of 1: 1 minus fees and charges. At the same time, reserve assets must be held remotely and be protected from bankruptcy and from other creditors of the company..

“The mechanisms for stablecoins should offer clear
error resolution processes, to protect users from unfair or misleading actions or practices, and to protect user data, ”the document says.

Despite the impending restrictions, the working group members recognize that digital payments, including USD-backed and other stablecoin schemes used as payment systems, can increase efficiency and competition, lower costs, and facilitate broader financial inclusion.. 

“The statement reflects a commitment to both promote the important benefits of innovation and achieve critical goals related to national security and financial stability. Regulators will continue to closely monitor the stablecoin agreements and look forward to further dialogue on these issues, ”said Deputy Finance Minister Justin Muzinich..

The working group included the US Treasury Secretary, Chairman of the Board of Governors of the Federal Reserve System, Chairman of the Securities and Exchange Commission, and Chairman of the Commodity Futures Trading Commission..

White House prepares restrictions for stablecoins

Earlier, BeInCrypto reported that the community criticized the decision of US lawmakers to impose restrictions on the issuance of private stablecoins, citing the protection of the rights of “people of different skin colors with low and middle income.”.

Europe is also against stablecoins

The European Central Bank is also against the turnover of stablecoins. Earlier, the head of the ECB, Christine Lagarde, said that stablecoins could threaten the stability of the euro and its digital form, so she urged colleagues to speed up the process of developing the CBDC Paper bills and coins may be a thing of the past due to a new financial instrument – central bank digital currency (CBDC). As of … More.

“The digital euro complements cash and ensures that consumers continue to have unrestricted access to central bank money in a form that meets their growing digital payment needs,” Lagarde said..

In September of this year, several EU member states at once advocated stricter regulation of the turnover of stablecoins. Thus, Germany, France, Italy, Spain and the Netherlands called on the European Commission to increase pressure on issuers of stablecoins, arguing for tightening “consumer protection” and “maintaining state sovereignty in monetary policy”.

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When speaking of stablecoins, European politicians mean primarily stablecoins. Stablecoins – literally translated from English “stable” coins – continue to gain popularity in the digital asset market. With … More LibraIn June 2019, Facebook announced preparations for the release of the digital currency Libra. The social network project immediately attracted attention … More (currently DiemIn June 2019, Facebook announced preparations for the release of the digital currency Libra. The social network project immediately attracted attention … More), which can compete with all existing fiat currencies.

Despite the tightening of requirements, the capitalization of stablecoins is growing steadily. For example, the capitalization of USDC has grown by 10%, while the capitalization of the stablecoin USDT has exceeded $ 10 billion..

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White House prepares restrictions for stablecoins
White House prepares restrictions for stablecoins
White House prepares restrictions for stablecoins
White House prepares restrictions for stablecoins