US Congressmen Propose a New Bill to Protect Customers from Cryptocurrency-Related Financial Threats

Congresswoman Rashida Tlaib, in association with congressmen Jesús García and Chairman of Task Force on Financial Technology Rep. Stephen Lynch, proposed a draft bill that tries to defend customers from cryptocurrency-related financial threats.

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New Congressional bill states it would be ‘illegal’ to issue stablecoins

A law such as the STABLE Act will guarantee that these companies work under the regulators to secure the consumer’s protection.

According to a statement published by the office of Rep. Rashida Tlaib, the draft bill, if passed, “would defend customers from the threats professed by rising digital payment tools, such as Facebook’s Libra and other Stablecoins currently allowed in the market, by managing their issuance and relevant commercial movements.

The lawmakers’ bill called the “Stablecoin Tethering, and Bank Licensing Enforcement (STABLE) Act is intended to supervise the movements of Facebook’s proposed digital currency, Diem. Other stablecoins will also come under this bill, where movements such as issuance could be observed.

The bill would prominently direct that any planned issuer of a stablecoin to get a banking license” and “that any business giving stablecoin services must obey the proper banking laws under the current governing rules. The law was put forward by Tlaib along with Reps. Stephen Lynch and Jesús García — all of whom approved a letter that aimed U.S. Comptroller Brian Brooks for his locus on cryptocurrency-related concerns earlier this month.

The bill states that stablecoins are a sort of security under federal legislation, as tweeted by Rohan Grey, an assistant professor at Willamette Law.

As @AyannaPressley noted in a hearing with Libra's head, David Marcus, last July, the only reason Facebook is even entering this space is because the federal government has failed to provide a safe, secure digital payments system that the public trusts.https://t.co/0VYeSvBksC
— Rohan Grey (@rohangrey) December 2, 2020

According to the bill, the draftees seem to be pitching a broad administrative web to include those that issue stablecoins or give business services linked to them.

The text states:

It shall be unlawful for any person to issue a stablecoin or stablecoin-related product, to provide any stablecoin-related service, or otherwise engage in any stablecoin-related commercial activity, including activity involving stablecoins issued by other persons, without obtaining written approval in advance, and on an ongoing basis, from the appropriate Federal banking agency, the Corporation, and the Board of Governors of the Federal Reserve System