On Wednesday night, Congresswoman Rashida Tlaib introduced a bill before the U.S. House of Representatives looking to make fiat-pegged stablecoin operators abide by the same rules and registration requirements expected of banks.
The legislation, under the name “the Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act,” sets out a fresh and extremely expansive definition of stablecoin. It furthermore dictates a series of limitations that outlaw stablecoin issuance for any entity that is not “an insured depository institution that is a member of the Federal Reserve System,”
More aggressively, one of the bill’s provisions would make it:
“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.”
The provisions provoked a remarkably unified outcry from the crypto community, including from Tlaib’s colleagues on the Financial Services Committee.
“The implications for this are just horrible,” Representative Warren Davidson told Cointelegraph regarding the bill. “Among the worst effects are for the people Tlaib is trying to protect, which are the unbanked and underbanked.”
The bill’s requirements, Davidson reasoned, would ensure that only major banks would be able to use stablecoin technologies in the U.S. “I don’t know their motives, but I know the effect is to lock in JPMcoin and kill everything else.”
In a statement, Congressman Tom Emmer similarly put forward the advantages that stablecoins could have for the low- and middle-income users:
“Those of us supportive of developing these new innovations in the United States have worked to learn about and understand this technology, which stands to have enormous beneficial impacts on low-to-moderate income Americans, and individuals worldwide.”
Emmer and Davidson are both Republicans, and…