Bitcoin course still on the upswing after US draft law for Stablecoins
A bill to regulate Stablecoins was proposed in the US Congress on Wednesday. This would require publishers of Stablecoins to have a banking licence. The Bitcoin price then rose significantly.
On Wednesday, Rashida Tlaib, Jesús García and Stephen Lynch proposed a new cryptography law in the US Congress. The proposal is entitled the „Stablecoin Tethering, Crypto Code App and Bank Licensing Enforcement (STABLE) Act“. As a law, it would impose heavy requirements on the issuers of Stablecoins, including the acquisition of a banking licence approved by the US Federal Reserve.
Congress is the legislative body of the United States and is divided into the Senate and the House of Representatives. In order to become law, the committees of the House of Representatives and the Senate would have to give their approval. This is considered unlikely in this case, since few of the bills in the United States actually make it to the legislative stage.
The bill would be a high hurdle
If the proposal is implemented, it is likely to create significant difficulties for many suppliers of stablecoins. Obtaining a banking licence in the US is difficult and costly. The licensing system is designed to protect consumers from rogue suppliers.
This difficulty is evidenced by the fact that only 52 applications for such a licence were submitted in the US between 2013 and 2018. In the course of the procedure, many of the applications were also withdrawn, probably after the applicants realised that they would not be successful.
The products affected by such a law would include Tether (USDT), USD Coin (USDC) and TrueUSD (TUSD). But the announced Facebook crypto-currency „Diem“ (DIEM), which was previously called „Libra“, would also be affected.
How does the Bitcoin exchange rate react?
After the announcement of the bill, the Bitcoin exchange rate rose noticeably.
Of course, it is not entirely clear whether this is related to the announcement or the generally hopeful mood on the crypto market. VISA, for example, recently announced that it wanted to integrate Stablecoin USD Coin. It has been known for a long time that PayPal is buying Bitcoin to use it in its own ecosystem.
It is also noteworthy that Larry Fink, the CEO of BlackRock, recently made a positive statement about Bitcoin. BlackRock is the world’s largest asset manager, managing $7 trillion in assets. When you consider that all the gold mined in the world is currently worth „only“ $6.6 trillion, it is clear how important BlackRock is. This is especially true if one would decide to invest in crypto there.