How Congress Can Stop the Looming Crypto Disaster

Newsletter/Publication

Just Security

Abstract

Washington, D.C., is beset by legislative gridlock, but stablecoins—a type of crypto-asset pegged to the U.S. dollar—have become a bipartisan priority for all the wrong reasons. Both the Senate Banking Committee and House Financial Services Committee have advanced legislation to create a bespoke, light-touch regulatory framework for stablecoins; the full Senate is expected to begin considering its stablecoin legislation this week. As they consider this legislation, members of Congress should be fully aware of the risks stablecoins pose to U.S. national security and its financial system.

The legislative and entrepreneurial frenzy around stablecoins is part of the broader embrace of crypto following the re-election of U.S. President Donald Trump. In anticipation of stablecoin bills soon becoming law, the Trump family’s World Liberty Financial crypto business announced plans to create a Trump-branded stablecoin. It will be used in transactions by the Emirati sovereign wealth fund, facilitated by Binance, a crypto company that has previously pled guilty to money laundering and sanctions evasion. El Salvador-based Tether—the issuer of the world’s most popular and most notorious stablecoin—recently said the stablecoin legislation will allow it to issue its first stablecoin in the United States.

Link to Full Text

Share

COinS