The Stellar Development Foundation (SDF) has recently criticised the STABLE Act by the U.S. Congress to regulate the cryptocurrency industry. Danelle Dixon, CEO at SDF, has stated that the act by the government is to fit the blockchain technology into the outdated regulations. Dixon has mentioned the difference that cryptocurrency and blockchain technology gave proper access to financial services. According to her, if the STABLE Act is passed, the whole power will get back into the hands of the bank, which will completely ruin the idea of cryptocurrency.
"We need to empower people, not banks. We need to work together to create the right regulatory frameworks that foster innovation, not stifle it. New solutions require new thinking." @DenelleDixon shares her thoughts on the STABLE Act.https://t.co/tNl0nwZp3e
— Stellar (@StellarOrg) December 3, 2020
SDF Believes STABLE Act Will Harm the Consumers
The main purpose of the STABLE Act is to treat all the stablecoin issuers as financial service providers. Stablecoin issuance requires approval from the Federal Reserve and stick to the banking regulations. The stablecoin issuers are also required to obtain either FDIC insurance or maintain Fed reserves.
The main purpose of SDF is to protect the consumers and on the other hand, Dixon believes that STABLE Act is not going to benefit any customer. She mentioned:
“First, it would effectively grant a monopoly over promising new payments technology to big banks, giving banks more power and entrenching their already highly concentrated market power.”
Banks Will Be Having the Ultimate Power
Banks do not have much interest in stablecoins and they view them as competition. Through this, banks will be having the ultimate freedom for raising prices and reducing customer services at the same time. Dixon has also urged the U.S. Congress to develop a proper regulatory framework for the industry that will be in favour of crypto traders. Most of the prominent personalities of the crypto industry are not in favour of this act. However, it is yet to be seen whether U.S. lawmakers will be making some amendments to this act or not.