US lawmakers proposed a new regulation to protect consumers from the risk associated with cryptocurrencies, especially stablecoins.\r\n\r\nCongresswoman Rashida Tlaib, Congressmen Jesús García, and Chairman of Task Force on Financial Technology Rep. Stephen Lynch introduced the “Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act.” The purpose of this proposal is to protect the consumer from the risks they may experience while buying and selling cryptocurrencies. In the article, they give examples of Facebook’s Libra, which rebranded to Diem and other stablecoins. As they pegged to some traditional currency such as the US Dollar, they need further monitoring to be accepted as a medium of exchange, which may cause some monetary problems. \r\n\r\nThe Stable Act can help to solve the risks such as liquidity and credit risk. As the COVID-19 caused malfunctioning in the financial intermediaries, the cryptocurrencies served as a cheap and fast solution for people with low and medium income. This widespread usage of stablecoins may cause some unexpected harm to users. According to the press release, the Stable Act addresses these topics:\r\n\r\n \tRequire any prospective issuer of a stablecoin to obtain a banking charter;\r\n \tRequire that any company offering stablecoin services must follow the appropriate banking regulations under the existing regulatory jurisdictions;\r\n \tAnd require that any stablecoin issuers obtain FDIC insurance or otherwise maintain reserves at the Federal Reserve to ensure that all stablecoins can be readily converted into United States dollars, on-demand.\r\n \tRequire that any company or bank issuing a stablecoin to notify and obtain approval from the Fed, the FDIC, and the appropriate banking agency 6 months before its issuance and maintain an ongoing analysis of potential systemic impacts and risks;\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\n\r\nReaction from the Crypto Community\r\nThe cryptocurrency community did not welcome the regulation for the stablecoin. Many tweets were protesting the Stable Act. Meltem Demirors, the Chief Strategy Officer of CoinShares, commented about the opposite effect of this act. \r\n\r\nthis has the OPPOSITE effect\r\n\r\ncryptocurrencies LOWER the cost of servicing populations that have historically been excluded from the banking sector. raising costs and compliance obligations forces companies to cut access for unprofitable clientele.\r\n\r\nplease, no more clowning ? https://t.co/IbjqXJpT4F\r\n— Meltem Demirors (@Melt_Dem) December 2, 2020\r\n\r\n\r\nThe community thinks that regulating the field which belongs to the decentralized world is not a good idea. The application of regulation may be beneficial for users buy they protest too. Companies will hurt by the supervision, and they may even think about leaving the USA market as was the case with BitLicense.\r\n\r\n#coinsfera #cryptonews #buybitcoinistanbul #buybitcoindubai\r\n\r\nDisclaimer: All information provided in the content is for informational purposes only and should not perceive as an investment, financial, or trading advice. Any investment decision you make should be a personal choice based on financial knowledge, experience, and market research.