Bitcoin Forum

Today, I read a new in Decrypt.co about USA proposed bill would make it illegal to issue stablecoins in the US if not federal approval. It was proposed by 3 lawmakers: Rashida Tlaib, Rep. Jesús “Chuy” García and Rep. Stephen Lynch to manage the stable coin market. And it is aiming Tether (USDT) because as you know, USDT can't prove that behind 1 USDT is guaranteed by 1 real USD. And this news is released when Bitcoin is on a strong growth and want to break its old peak, this is quite similar to 2017 when Bitcoin reached 20k and after that , there were many bad news about Tethers at that time. And there is a speculation that it is a shark strick to other investors be fear and not dare to sell their Bitcoin at that time.


Am I too suspicious? Hope to receive opinions from you guys!  ;)

All US bills need 2/3 Senate majority approval to pass, assuming the lawmakers even make their bill progress to that stage. I don't think it stands a chance at getting to the voting part though - stablecoin companies will lobby against this bill since it would give USD PAX/USDC and even Tether (at least for some time) headaches.

I don't think such bill will be approved honestly, most of the law makers and the higher ranks officials really don't buy the idea of bitcoin firstly
 So if the go straight to making a bill again bitcoin it will be rejected, most people trade their BTC to a stable coin for
easy withdrawal ,and passing a bill on a stable coin ( usdt),will not just dis-stabilze it stability but also it's value in the crypto market.
I think this is just a way to fight again the massive pump in bitcoin ..

Actually, to a completely bill is approved and release offically, it must a lot of time and it's also not easy, because USDT will not sit tight and the influence of USDT to the cryptocurrency market now is too much. I mean news like this maybe cause confusions for investors about stable coins and they will continue to hold Bitcoin instead of transfering to stable coins when they want to take profit.

If you think about it what stable coins pegged to fiat do is exactly the same as what banks do with small differences. You deposit your money with the bank/company then they give you something else in their centralized database that is supposed to be 1:1 with fiat you deposited, that something is the number in your account/the balance in your address. They fully control your money and can close down your account and move your money at any time. The only difference is that you keep your stable coin keys locally which may as well be custodial!

This doesn't sit well with government that wants to regulate banking system and doesn't let new banks show up out of nowhere. Stable coin issuer now being a bank needs to be prevented. That is why it has always been risky to own stable coins such as Tether (USDT). They can be shut down overnight by FBI.

It is expected that in the future governments will start to intervene a lot in the cryptocurrency market. StableCoin and the exchanges will be the ones that most governments will pressure, because in my opinion the StableCoin needs to be audited frequently and the exchanges need to be inspected. until a few days ago i was hearing about projects of  StableCoin that are not directly linked to the USD and i was wondering if that was correct or not and if it would be worth using something like that. I know that USDT have shady past and present and a non-transparent way of working, but I still use USDT to trade, but I use it with caution

Well I went through some articles on this as well, the new government of America is coming up with new regulations on crypto currency. I personally feel this could be a major blow for BTC because it is popular only because of its volatility especially on the ICOs. If they are working to stable crypto coins then we can't expect massive volatility and liquidity looks like they want to keep a full to cryptos extreme price surge.

Project laws are often weird, controversial and risky, but they usually don't become laws. As for tightening the regulations of stable coins, I'd actually say it's a good idea. Stablecoins should prove they're backed up, and they should be strictly supervised because people rely so much on them remaining stable. Bitcoin, on the other hand, is not stable, and people are aware of that, so there's no risk of the same kind involved as with USDT. But fear not, it probably won't get approved because it introduces a lot of centralization that private businesses wouldn't appreciate.

See I don't really think such law will be implement because when ever bitcoin goes up different information or news will be coming up from different angle so irrespective what article you see online not all information concerning it are genius information, because its obvious that no government can change regulations of btc except something came up turn against cryptocurrency, I seen that before such thing might happen btc will be under the care of government.

It is undeniable that the crypto market will be greatly affected by the arrival of the new US president. The new president will want to sort out parliament in a new way, and push for a new budget bill. But most trades use stable coin as an alternative to fiat currency for crypto trading. I don't think there will be Senate support for such kind of bill and stable coin regulation.

Well, I also agree that stable coins regulation should be strictly implemented.  The said "backed"  fund must tally to the circulating supply, and these planned policy is a good thing since once approved, stable coins will be thoroughly audited and checked if the claimed back fund can support the whole token.  This will somehow protect Stable coin holder from possible losses  due to lack of fundings.



Well, who knows, sometimes the least expected happens.

If they happen to understand what cryptos are and what stable coins can do, they would actually go for a push of it. They don't want others to see printing a lot of money and that's why the government would like to have a glimpse of stable coin issuers.

And with the arrival of the new POTUS - Biden. We'll never know what would be his concern towards crypto in general including these stable coins. @Op, don't you worry about the growth of bitcoin. We're seeing a genuine increase and it's not the same as before anymore.

To me it is very obvious why this is happening, bitcoin is rallying and suddenly a news like this comes out and it is clear as day that they are trying to scare the people of this market, but how? Let's assume that the market begins to go down during the next weeks, many smart traders are going to move their money out of volatile coins and they're going to move to stable coins, but now there is the risk that those coins are going to be regulated and maybe even closed down, so most likely they are hoping that people choose to sell for fiat instead of stable coins so they can tax them on their capital gains.

Exactly, but OP also made one good point here that this thing is always coming up whenever btc is touching the skies. Look at the current rate of up surge and how people gaining money by selling their bitcoins into stablecoin. This is bad for the whales who would want the price to go even further the current barrier of 20K. This time it would be historical event if we cross this barrier and to make it happen, people who had FOMO reactions and conversions into stable coin needs to get out of it and again buy the BTC.

It's like mutual global pump if this news spreads on serious note. This time everyone will have fear of USDT or few known stable coins getting illegality issues. Just imaging, everyone will start selling them for BTC.

That's a badass savage play indeed. ;D

The proposed bill may take time like month(s) or even year(s) before it became a law.  If we are thinking that, this is a whales' action towards us (the Bitcoin holders) who might be experiencing FOMO then it is too late, for selling Bitcoins could be done right before the bill became a law. 

IMO, if they are using this proposed bill to make people refrain from selling, therefore I can say that they are absolutely wrong instead they should have done this at an earlier time because for me at this point, the news can have a different result where people might panic, selling their bitcoins in order to obtain their profits, right before the bill became a law and have it implemented.

That's the reason I am worrying but I also realize that the situation now is quite different to 2017 when at that time USDT is almost a dominate stable coin and almost people can only sell their BTC to USDT to take profit, and I remembered that the exchanges in that time hadn't have the service to exchange directly BTC to USD or the currency of their country as now.

USDT has never been the dominating pair for bitcoin traders. The volume has always been so much higher in bitcoin versus fiat pairs. Instead Tether has always been mainly used in altcoin trading and by altcoin traders. If you look at which exchanges have USDT you can see it is "altcoin" exchanges like Binance for example rather than bitcoin exchanges such as Coinbase.

There are some facts -

1. It is a proposed bill and has not yet became a law
2. USDT couldn't prove that they are backed by 1:1 USD

However, USDT is the only cryptocurrency whose daily trading volume often exceeds its market cap. Even after people knowing the fact that USDT is not backed up by real USD at 1:1 ratio, people still uses this one and its adoption is increasing fast because of the convenience it provides to the traders. I don't think this is a shark trick just to make people worried about stablecoins because today we have many alternatives available. I know there are speculations because as soon as the market touches previous ATH, a lot of investors from 2017 will start selling -off their coins, especially those people who have burnt their hands investing in bitcoin. They are just desperate to recover their invested amount. So there will be a huge sell pressure which may drag the market down after reaching the previous ATH.

These kind of tricks can work on only US investors, remaining countries will have no effect! Unless they spread a FUD that bitcoin will reach 50k in few months, there's no way people will stop selling their 2017 holdings! The threat is real!