By Michael Scott
Partisan Politics to Blame for Stalled Stablecoin Legislation
The Blockchain Association chief executive Kristin Smith, in an interview conducted during Messari Mainnet last week, revisited the stalled stablecoin legislation. The stablecoin crusader reiterated support for pro-crypto legislation.
Smith sat down with André Beganski from Decrypt and emphasized that legislation should catalyze stablecoins and cryptocurrency. The Blockchain Association boss decried that majority rules and regulations fronted by policymakers and lawmakers often harbor counterproductive elements to cryptocurrency and stablecoins.
The Blockchain Association head admitted that realizing stablecoin legislation has become challenging for the US, given the process of explaining the innovation. Smith seized the interview at this year’s Messari Mainnet to review the status of pending legislation and Congress’ struggle to realize consensus on crypto regulation.
Smith profiled stablecoins as digital tokens pegged to a fiat currency carrying an equivalent value, such as the US dollar. The innovation targets eliminating volatility witnessed in changing exchange value for other cryptos. As such, the price varies with the currency linked. She observed that USDT issued by Tether and USDC Coin (USDC) by Circle are the two leading stablecoins in market capitalization and usage.
Beyond the stablecoins, the US regulators have portrayed stances that have turned a hindrance to digital assets industry growth and usage. Smith observed that while crypto advocates now inhabit Congress, scoring a victory for the sector is unforeseen.
Partisan politics blend with support for regulation through enforcement by the Securities and Exchange Commission, which explains the slow pace of adopting any legal framework. The delay in parliament, partisan politics, and mixed support from the White House leaves the US trailing its international counterparts, aggressively marching to optimize benefits accruing from digital assets, decentralization finance, and blockchain technology.
Stablecoin a Digital Wrapper to Optimize US Dollar
Smith revisited the stablecoins journey by observing the 2019 move by now-defunct Libra to enter the segment. The hyped arrival prompted the government to develop an interest in stablecoins and, to a broader extent, cryptocurrency.
Smith reviewed the stablecoin legislation journey during the Trump administration and the present Biden government. The Blockchain Association executive observed consistency in the urge for Congress to enact stablecoin-specific legislation.
Smith laments that nothing is prospering even after bipartisan efforts, particularly those organized by Democrat Maxine Waters as the House Financial Services Committee (HFSC) chair and Patrick McHenry as a ranking member. She wonders why nothing prospered despite the potential of stablecoins to cement the US dollar as the global reserve currency. The non-profit organization’s boss labeled stablecoins as the digital wrappers for the dollar.
Smith observes that the conversation is progressive, though acknowledged that Representatives McHenry and Waters play inverted roles today. McHenry has repeatedly accused Waters of leading the group and blocking legislative action.
The Blockchain Association head revisited her encounter when approaching the congressional team and two regulatory agencies. She indicates that the events featuring the US Treasury and the Federal Reserve feature less-than-friendly crypto agendas.
Smith observes that the conversation regarding stablecoins legislation has advanced. Nonetheless, she pointed out 50 obstacles to the process that are 90% complete to the coveted stablecoin legislation. She decries that the state’s role in legislation has become the stumbling block as they seek opportunities to regulate the stablecoin space. The US federal government regulators express concerns about devolving stablecoin legislation. The executive supports a perfect world where the Fed exercises complete control.
Stalling on Stablecoin Legislation Hindering Crypto Advancement
Smith observed that the move by the government to stall legislation portrays signs of inherent problems for the industry and potential hindrances to tech advancement. She informed the crypto industry executives that the government will not create a framework to accommodate all good innovations.
Smith restated that she does not oppose the legislation. Nonetheless, she appreciates that every reasonable person would envision the sudden FTX collapse during discussions involving crypto legislation. The need for consumer protection is paramount. As such, consumers desire assurance that the intermediary given money will safeguard the funds.
Smith holds that the conversation on stablecoins legislation is yet to end. Nonetheless, the process is slowed by the emergence of several challenges. The executives admit that Congress has members not fond of daily digital and internet usage.
Overcoming the biggest challenge of misinformation necessitates explaining the innovations. She observed that the industry and regulators progressively embraced the pathway to accomplish the legislation.