Price Preview December 7 - 13
US proposes the STABLE Act in a misguided attempt to regulate stablecoins
Hello Ethereans!
The Eth2 deposit contract has smashed passed the 1 million ETH milestone with over 1% of all circulating ETH now staking. At this point, it is fair to say that the first phase of Eth2 has been a resounding success, attracting more participants and more value than any other blockchain before it.
While there is a huge amount to celebrate in Ethereum and a lot to be excited for, a murky regulatory backdrop is beginning to build. Last week, US Congresswoman, Rashida Tlaib, announced the Stable Tethering and Bank Licencing Enforcement (STABLE) Act, a bill which aims to make unlicensed stablecoin issuance (among other things) unlawful in the United States.
The bill, in its current form, has deeply troubling consequences for Ethereum and crypto at large. Under the bill, node operators (i.e. the many thousands that recently joined Eth2 and those existing on Eth1), will be liable for the activity that takes place on the Ethereum network.
If stablecoin issuance is deemed unlawful in the United States, then a node that processes a transaction that calls a “mint” function for a new stablecoin could find themselves unwittingly breaking the law.
The politicians and legal scholars that have put forward this bill have been battling on Twitter to defend their position (click “show more” in the Twitter thread); seemingly growing more radical in the face of extreme pushback from cryptocurrency advocates.
What is maddening about this legislation is many-fold. From the technical ignorance of those promoting the bill through to its fanciful goal of controlling open software and its disregard for freedom of speech. It also has little grasp of the mechanisms behind stablecoins; yes, many are “dollar backed” with arguably good reason for oversight (*ahem*, Tether), but others are algorithmic and introduce a grey area that would make any politician’s brain explode.
One of the more peculiar motivations behind the bill appears to be targeted at equality, implying that cryptocurrency use somehow disenfranchises minorities - something of a first for these ears.
The proposed bill is quite simply misinformed to the point of embarrassment. While this regulation would be completely unenforceable without the coordination of all major Western and Eastern countries, it does create enormous frustration for investors, users and developers who find themselves - after 10 years - still being totally misunderstood by those in office.
With $25 billion of stablecoins circulating (almost entirely on Ethereum), a sudden overreach by regulators could send panic through the markets. Fortunately, companies like Circle, Coinbase, Coin Center and others, will be fighting this case for all of us. Individuals can also support the fight against ill-thought regulation by writing to their political representatives or donating to the non-profit, Coin Center, an organization that actively educates Washington about the benefits and risks of crypto.
In this preview we look at:
Coinbase announces plans for Eth2 staking
Ethereum flips Bitcoin on node count
Regulators take aim with the STABLE Act
Cryptocurrency adoption strengths fundamentals further
Media roundup
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