BREAKDOWN: Why Stablecoins Are the First Battleground of the Coming Crypto Regulation Wars
CoinDesk Podcast Network
CoinDesk
4.8 • 689 Ratings
🗓️ 3 December 2020
⏱️ 26 minutes
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Summary
The STABLE Act would force all stablecoin issuers to have bank licenses, a shot across the bow that portends an emerging legal challenge for the industry.
This episode is sponsored by Crypto.com, Nexo.io and this week's special product launch, Allnodes.
On Wednesday, three U.S. congressional Democrats announced the STABLE Act, an 18-page bill that would require, among other things, stablecoin issuers to acquire banking charters, get approval from the Federal Reserve and hold FDIC insurance.
The bill’s authors claim stablecoins represent a continuation of the shadow banking system that preys on poor communities. The crypto industry argues this overly burdensome would not only stifle innovation but ensure the only players in this new space are the deep-pocketed fintechs with the resources for compliance.
In today’s episode, NLW argues this is more than just another bill that will go nowhere in Congress, it’s the opening salvo of a new set of arguments that will define the next face of regulatory battles for the entire crypto industry.
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Transcript
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| 0:00.0 | one of the biggest blockers to the transmission of monetary policy, including new conceptions |
| 0:05.3 | of monetary policy like are inherent in MMT or modern monetary theory, require tamping down |
| 0:11.4 | the power, reach, and breadth of the shadow banking system. And I believe that when they see |
| 0:16.8 | stable coins, they see Euro dollars 2.0, but in a visible form, in a form that they can |
| 0:22.3 | snuff out before they begin. That is the real context that we have to contend with, and it's a |
| 0:28.5 | big one. Welcome back to The Breakdown with me, NLW. It's a daily podcast on macro, |
| 0:36.8 | Bitcoin, and the big picture power shifts remaking our world. |
| 0:40.4 | The breakdown is sponsored by crypto.com, nexo.io, and all nodes. And produced and distributed by |
| 0:46.1 | CoinDesk. What's going on, guys? It is Thursday, December 3rd. And today we have a discussion |
| 0:53.8 | about something that all of Bitcoin |
| 0:56.3 | and crypto Twitter was absolutely going off about last night. We're talking about the new |
| 1:03.4 | Stable Act and more broadly why governments are going after stable coins. Now, I think this is a really |
| 1:10.8 | important topic and something |
| 1:12.9 | that we're going to be discussing a lot more. So instead of doing a normal brief, I'm going to dive |
| 1:17.4 | right in. So let's go back over the course of the last week. There's been a lot of bluster |
| 1:23.4 | in the macro community about what governments are going to do as cryptos get bigger, right? |
| 1:29.3 | We talked the other day about how Ben Hunt, Raul Paul, George Gammon, all had gotten into |
| 1:34.4 | TIFs, frankly, with Bitcoin Twitter about whether government was going to let it continue |
| 1:39.2 | to exist in the same state or whether there would be strict guide rails and guardrails put up around it |
| 1:45.3 | that really railroaded it into the existing system. Part of this was driven by rumors that came out |
| 1:51.7 | just around Thanksgiving that U.S. Treasury Secretary Mnuchin was planning to rush some new |
| 1:57.6 | regulations around self-custody issues. So really the biggest source for this was |
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