Warren Davidson (R-OH): The SEC should be looking at Tether rather than at Ripple and XRP

[RobertHarpool]

Tether is 'a time bomb' says Congressman Warren Davidson

“Regulators ought to get their arms around Tether. There’s, frankly, more reason for the SEC to be looking at Tether than for them to be looking at Ripple and XRP.” said Davidson, member of the Congressional Blockchain Caucus as well as the House Financial Services Committee. 

Damn skippy, I say. 

[thinlyspread]

I do wonder (and worry) how they will try to regulate stablecoins though. On the one hand, I do get why we need financial regulations in place (e.g. banking or money transmitter licences, etc) and we can't have big tech controlling everyone's financial lives with their potentially Orwellian versions of stablecoins. On the other hand, (small) tech has largely been responsible for innovation and arguably stablecoins do NOT fit nicely into current regs.

But most of all, I wonder about how they will regulate a specific type of stabelcoins, i.e. algorithmic pegs. I do not see how they can easily go about stopping these things even if they wanted to. If we do indeed see robust and highly decentralized/distributed networks (I'm not convinved we have them yet!) that govts cannot shut down, then algo-based or collaterlized pegs can work freely within them. Only the end points could be attacked. 

Plus I just love the idea of algo-stablecoins like the one proposed by David Schwartz. 

[brianwalden]

2 hours ago, thinlyspread said:

I do wonder (and worry) how they will try to regulate stablecoins though. On the one hand, I do get why we need financial regulations in place (e.g. banking or money transmitter licences, etc) and we can't have big tech controlling everyone's financial lives with their potentially Orwellian versions of stablecoins. On the other hand, (small) tech has largely been responsible for innovation and arguably stablecoins do NOT fit nicely into current regs.

But most of all, I wonder about how they will regulate a specific type of stabelcoins, i.e. algorithmic pegs. I do not see how they can easily go about stopping these things even if they wanted to. If we do indeed see robust and highly decentralized/distributed networks (I'm not convinved we have them yet!) that govts cannot shut down, then algo-based or collaterlized pegs can work freely within them. Only the end points could be attacked. 

Plus I just love the idea of algo-stablecoins like the one proposed by David Schwartz. 

For reference, UST (Terra USD) is currently the largest algorithmic stablecoin with a supply of just over 10B. I really like what Terra is building.

It really will be very interesting to see how the regulations are crafted. If they don't take algorithmic stablecoins into account, they could cripple collateralized stablecoins and open the floodgates for algos. This can be risky in and of itself. Shitty algorithmic coins go into a death spiral when crashes happen - so the law could unintentionally push people into even riskier investments than current leading stablecoins like USDT and USDC.

But if they try to restrict everything pegged to a dollar, that could also have unintended consequences. There are many forms dollar-derivates - they could end up affecting much more than just crypto markets.

Personally, I kind of want crushing regulations in the short run. Crypto has gotten soft. In the long run it will force the crypto industry to get back to its roots of developing truly decentralized systems.

[RobertHarpool]

I have long thought that a Fed issuance of a crypto dollar will completely negate the need for any USD-pegged stable coin.

Why use a chancy USDT when the real McCoy exists digitally? 

This would, of course, eliminate the need for any regulation in the directly-pegged stablecoins space.

I have not thought very much about algo-stable coins. 

[brianwalden]

2 hours ago, RobertHarpool said:

I have long thought that a Fed issuance of a crypto dollar will completely negate the need for any USD-pegged stable coin.

Why use a chancy USDT when the real McCoy exists digitally? 

This would, of course, eliminate the need for any regulation in the directly-pegged stablecoins space.

I have not thought very much about algo-stable coins. 

CBDCs only increase the need for decentralized money. At least cash you can spend with anyone who's willing to accept it. CBDCs will give governments even more control over how people can spend their money.

Edited February 9, 2022 by brianwalden

[RobertHarpool]

@brianwalden so depressing to realize how far in advance of the government we r, eh? Why this is still a conversation at the Fed is beyond my comprehension. 

[Julian_Williams]

16 hours ago, RobertHarpool said:

I have long thought that a Fed issuance of a crypto dollar will completely negate the need for any USD-pegged stable coin.

Why use a chancy USDT when the real McCoy exists digitally? 

This would, of course, eliminate the need for any regulation in the directly-pegged stablecoins space.

I have not thought very much about algo-stable coins. 

If a coin is pegged to he price of gold - that makes it a stable coin too?

 

[brianwalden]

1 hour ago, Julian_Williams said:

If a coin is pegged to he price of gold - that makes it a stable coin too?

 

Yes you can call it a stablecoin because it's stable relative to gold. But I don't think there's really an agreed upon term for pegged assets that aren't pegged to fiat currencies.

[retryW]

9 hours ago, brianwalden said:

Yes you can call it a stablecoin because it's stable relative to gold. But I don't think there's really an agreed upon term for pegged assets that aren't pegged to fiat currencies.

Does anyone have a good explanation for what differentiates a stablecoin from just an XRPL IOU ? Because both fiat and non-fiat backed stablecoins seemed like the same idea as an IOU to me...

I'm about to watch David Schwartz XRPL stablecoin proposal as for some reason I've never seen it, I assume he'll do an alright job at telling me

Edited February 10, 2022 by retryW

[RobertHarpool]

@retryW ... aside from spelling, I've got nothing ...