Hey Jesstablecoiners
As the traditional economy continues to break apart, anyone who has any creativity and trying to provide solutions that conflict with the government is going to get squeezed. Governments want to be the only game in town, as they help create monopolies in tonnes of sectors, they too intend to have a monopoly—the greatest monopoly of all, the monopoly of money.
Stable coins have been a revelation regardless of how you feel about them and the drama surrounding projects like USDT. They've made it far easier to transact and get in and out of positions and provide an easy way to purchase goods and services with a medium many are willing to accept.
The appeal of stable coins
Stable coins also bypass a lot of banking regulation and allow for anyone around the world to own USD, which isn't as easy as you may think, should you be living outside the US. USD can be a freaking lifesaver if you're in a country with a rubbish currency like Lebanon or Venezuela.
However, getting anything done through banks isn't going to satisfy enough people which is why USDT and it's the use of various blockchains from ETH, BNB To TRON allow anyone to get into a stable coin/currency game with relative ease.
I've spoken about the various versions of stable coins in the past, so I am not going to go into it but only focus on physically-backed stable coins.
Also read
These are coins issued and managed by a custodial service that holds 1 government greenback for every digital dollar they issue; they need to maintain the 100% backing at all times. As coins are minted they add dollars to their reserve, as dollars are removed, so too an equal amount of coins need to be burned.
You can probably tell that this can easily become a cock-up of fractional reserve money printing, but that's a story or another day. Anyhoo, the good old US and A, are looking at pushing out another turd, I mean the congressional bill would require stablecoin issuers to secure bank charters.
Siding with institutions
As you can probably tell this is not exactly a law designed to help the people; these companies are offering a service and people are using them of their free will knowing the risks. But a banking charter would mean "additional" safety measures and "consumer protection". This is the trojan horse they built to ram the obvious nepotism right up your little poop shoot.
When in fact its obvious nepotism and control, these charters would favour a certain JPM coin, create a barrier to competition, make tracking and taxing easier, confiscation and on top of all that it can help force compliance such as KYC.
Innovation cannot be regulated
I personally wouldn't use a JPM coin, I hardly use stable coins as it is, but I can see the value and use in having it made part of the blockchain sector. I do think, however, that backed stable coins have now cut themselves off at the knees and have opened up the way for algorithmic stable coins to thrive.
If this regulation goes through it taints the backed stable coin model, and those who were already on the fence would happily toss those in favour of coins backed by the chain and the market, not the government.
As more liquidity flows into Bitcoin and ETH, it only increases the ability to mint stable coins and grow the market, in fact, the regulation of stable coins could mean that algorithmic stable coin needs improve. To increase the minting of algorithmic stable coins, the backed asset like ETH, BTC, Maker al need to improve liquidity and thus increase in value.
We've already seen platforms like CURVE trying to assist with liquidity and maintaining the peg of various stable coins through a basket of assets. I am sure if more liquidity flows out from backed to algorithmic, it can only assist these platforms and push users deeper into unregulated stable coins.
Perhaps I am TOO bullish, but I feel that every time governments try to regulate crypto, they only push the market to come up with better solutions.
They're effectively speeding up the growth by trying to harm the sector; the attacks will only continue as the market cap of BTC rises and drag crypto along with it, so I expect a few more shots from the state before they admit defeat.
Have your say
What do you good people of HIVE think?
So have at it my Jessies! If you don't have something to comment, comment "I am a Jessie."
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