With potential signs of brewing tension over multiple key languages Stablecoin The bill circulating in Congress, House Majority Whip Tom Emmer (R-MN), said this week that stubcoin issuers like Tether do not believe they need to comply with money laundering banks’ secret laws.
Emmer argues that including such provisions in the law would unfairly keep foreign issuers out. Regardless of jurisdiction, lawmakers believe that stubcoin issuers are not subject to strict anti-money laundering rules under the Bank Secrecy Act.
“The protections that the so-called bank secret laws should provide are drafted in cash, which is blockchain-driven,” Emmer said. Decryption Wednesday night. “And I think everything on the blockchain is open and transparent to people who understand how to follow the code.”
“The secret laws of banks that don’t reflect on this type of technology, digital assets, should be what we’re using,” the lawmaker added.
Stablecoins are typically digital assets fixed in the US dollar and are designed to maintain a stable price. These are used by cryptocurrency traders to enter and exit positions without the need for dollars, and are used as dollar equivalents in markets where the dollar is restricted or inaccessible.
latest draft Of the Genius Law and Stable Law, all Stablecoin issuers are treated as financial institutions under the Bank Secrecy Law. The law enacted in 1970 established a strict set of aggressive, aggressive anti-money laundering rules that American banks must follow to operate.
Bank Secret LawFor example, you are obligated to surveillance suspicious activity in regulated agencies, undergo routine audits, hire compliance personnel, and employ customer identification programs mandated by the Patriot Act.
Such requirements would pose a considerable hurdle for existing foreign Stablecoin publishers like Tether, the company behind USDT, and the undisputed leaders of the market. Tether, whose market capitalization is over $144 billion by USDT Stablecoin, is based in the US Virgin Islands and is set to move to El Salvador, but is still one of the world’s largest buyers of the US Treasury.
In the current setup, Tether enjoys much more stringent regulations than bank secret laws require, and the company’s leadership implies that the move to force all stubcoin issuers to comply with such rules will hurt businesses and support their competitors. In contrast, Circle, the publisher behind Stablecoin USDC, the second largest in the market, is already based in the US. The Circle is not yet complying with banking secret laws, but the company is regulated as a remittance bureau by the New York Financial Services Bureau.
The circle also resists Tether has already complied with the European Union’s elaborate MICA regulatory framework.
As stability laws in the US approach crescendoif they have to comply with the bank’s secret laws, what happens when Tethers will come to the US, or if a top player in Stablecoin Market is kicked out of the US financial markets?
Emmer doesn’t want to risk locking Tether and other foreign publishers from the fast-growing US Stablecoin sector.
“We have to let everyone compete in this area,” he said.
That doesn’t mean that Tethers do not need to adhere to certain rules in order to operate in the US. For Emmer, a fixed point is evidence of reserves. The government has shown the government that even during periods of market volatility, the token is backed up with sufficient collateral to lock its value into dollars.
That’s why Emmer believes Tether is roughly doing well. In 2021, the company partnered with Wall Street company Cantor Fitzgerald to help detain a portion of the US Treasury worth $92 billion. claim To keep it now.
“Tether has done a great job over the past four years,” Emmer said.
The House Financial Services Committee is expected to mark up stable legislation during next week’s session. Meanwhile, the Genius Law passed away earlier this month by the Senate Banking Committee as already strong. Bipartisan support– Bank secret languages as is. It could face a full vote on the Senate floor in the coming months.
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