A bill regarding stablecoins has been proposed by US lawmaker Josh Gottheimer; however, it faced backlash from critics
A recent CNBC piece has shared that a U.S. lawmaker from New Jersey, Josh Gottheimer and his team have unveiled a draft of legislation that places definitions around stablecoins and details which stablecoins can be called “qualified” ones.
However, the project was criticized by several critics.
“Qualified” stablecoins, collaboration with the crypto space
New Jersey Rep. Josh Gottheimer’s early draft, issued on Feb. 14, suggests giving definitions to stablecoins. According to the document, a stablecoin can be considered “qualified” if they can be exchanged into U.S. dollars at a 1:1 ratio.
Additionally, these “qualified” stablecoins, according to the draft, can be created by a federally backed bank or non-bank. The latter must agree to store 100% of US dollars, US debt or any other asset approved by the US financial regulator, the Office of the Comptroller of the Currency, appropriate cash collateral to which the stablecoins will be pegged .
Gottheimer stated that the U.S. should not stifle innovation in the crypto market. Nellie Liang from the Treasury, who is spearheading efforts to regulate the crypto market, supported Gottheimer’s plan when she appeared in front of the House Financial Services Committee recently.
Critics attack stablecoins
According to Gottheimer, he and his team worked with the Treasury and Blockchain Association, as well as several crypto firms, to discuss the regulations suggested in the bill.
Critics, however, have been slamming the draft as they believe stablecoins are vulnerable to criminal use, manipulation and similar things.
Stable coins such as USDT and USDC have recently become increasingly popular among crypto users. Believers in them say that stablecoins combine the low price and high speed of cryptocurrencies for payments and the stability of fiat currencies, such as USD, EUR, etc.
