Topic: Stablecoin regulations and their future implications (Read 277 times)

Cryptocurrencies have come so far from the original purpose but these could lead to further improvement. Regulation is one thing that some people do concern. Yet, it won't necessarily be needed as a whole for the industry. Indeed, being backed by fiat, makes it not different or unique from fiat. It will be sizeable no matter what.

That's certainly true, mate. The real deal will be with so called "decentralized stablecoins" like DAI and bitUSD. They largely depend on algorithms than a third party to maintain their prices of $1 USD per coin. I wonder how governments will be able to regulate these stablecoins too? The pressure from Facebook's stablecoin named "Libra", has urged governments to regulate the industry. They're mostly afraid that these digital assets will replace traditional Fiat currencies within the mainstream world. For cryptocurrencies like Bitcoin and Ethereum, that's another story since they're largely volatile in price. Most governments don't care about these cryptocurrencies because of this factor. But expect stablecoins to be heavily regulated as they prove to be a better alternative than traditional Fiat currencies of today.

Nonetheless, time will us what will be the implications of stablecoin regulation within the crypto/Blockchain industry. If governments will be able to successful regulate stablecoins, then I believe we'll be able to see serious investors joining the industry. Otherwise, the crypto market won't be able grow into a massive user base because of the dreaded volatility inherent within every cryptocurrency across cyberspace. For the end user, stablecoin regulation shouldn't be a problem. But for businesses, and companies offering such solutions to their customers, this might be more of a headache than anything else. Just my opinion

this is clearly not good because the nature of crypto cannot be regulated by institutions or individuals, if that happens there will be a lot of rejection. and I think that is one of the initial ways to control the crypto market and this is one of the bad things in my opinion

When facebook was busy developing and wanted to launch a libra stablecoin, the government there looked compact and had planned to make regulations for it. Is this just a coincidence? Or deliberate, by lobbying the leaders of the regulators there?

It is clear how power produces a rule and must be obeyed by the stablecoin there, so that the future of stable coins will continue to be monitored and controlled according to their wishes for the reasons of that rule.

First of all, it is necessary to recall that stable coins are a digitized analogue of conventional currencies. The US government, of course, is not indifferent to who and in what payment systems will use their dollar. Therefore, the regulation of the circulation of its currency, even in digitized form, is quite normal for this government.

Stablecoins shouldn't be just regulated but also take a close look and should have laws specific to them as well.

Look at what happened with tether for the biggest example, there was no government that looked into it and those dudes opened a bank account in Bahamas, told people there was 1 to 1 ratio, everyone gave them one billion dollars and they gave people 1 billion dollars "worth" of digital currency that was literally depending on the money they got (they even said they had the money themselves AND got money from people so should have been 2 billion in the bank) but then they decided the money will not be backed 1 to 1 and even said money wasn't even money but mostly stocks and investments as well. Now exchanges started delisting them and telling people to withdraw and nobody is getting their money out of tether.

Most stablecoins already need a third party to keep the price constant, so I do not think this news will create any difficulties for their users. The project owners will be obliged to work more accurately, which in my view means more reliable coins. The only problem may be for decentralized stablecoins such as DAI, with their centralization they will almost be destroyed.

I am somewhat confused, with Libra actually trying to ruffle the cryptocurrency ecosystem that already exists.
With the regulation for this stable coin will be hampered because everything will be centralized, each transaction will be controlled.

Your definition may be as a copyright, so any fiat currency if you want to implement such a stablecoin that you call must have a permit, because the rights are those that govern in this financial sector. such as the Stablecoin example USDT is pegged at USD (U.S. dollar), and this must have a permit. Because the U.S. dollar is still controlled by the Federal Reserve Bank, and requires the permission of the US banking system for significant commercial use. And my assumption is more agreed if it is pegged like precious metals or industrial metals, because gold is a very valuable goods and free market (no need for certain permits). Also gold, silver, etc. More valuable to the supply that is provided by nature, so the price is gradually increasing, than on the use of Fiat that is only pegged and vacuum air.

If the current view is not good enough, stablecoin could be widely opposed in several countries. but if stablecoin can provide more benefits that can make people switch to using digital money, then I think the US is taking the first step because maybe the country still wants to manage its finances individually

I think its good for the stablecoins that pegged with the U.S dollars to be regulated since they are using a legitimate currency such as the U.S dollars to backed its stablecoin, and retain its valuation but my question is not all stablecoins are backed with U.S dollars. how about those stablecoins that was pegged with gold? for me it should not be subjected for regulation since it was not a sizeable asset class, unlike the fiat (U.S dollar). it was a standard government issue that's why the risk of being hook by the regulators is high.

I think that regulation of stablecoin is important, because here we are talking about crypto backed by Fiat. If there is no regulation, it is possible that the existence of fiat itself can be falsified or in other words there is no fiat that backs up the stablecoin. This is important to avoid fraud. This is the function of a country, to secure its people, especially in terms of money in this case.

For stablecoin projects like Facebook's Libra to become mainstream a lot of regulatory hurdles must be overcome and these at present are hindering its progress, especially in the US, but if they do become regulated it will further legitimize that aspect of the industry with a positive outcome overall

it's a good idea to set the Stablecoin for the future if a lot of crypto regulation is strict in various countries let alone the country's famous developers to make good projects. But want it if the government is not legalizing we have to be obedient than to be exposed to their criminal article for playing like this.

Agree. It'll be a hard time for mainstream businesses and companies to comply with regulations imposed by worldwide governments in order to keep their stablecoins legit. I wonder how this would work with stablecoins that are not backed by real USD reserves? (like DAI) This last one, is decentralized and relies on algorithms in order to maintain its value of $1 USD per coin. If regulation will also apply to decentralized stablecoins, then it'll be quite a challenge for the underlying Blockchain itself (in this case, Ethereum). Whichever way governments decide to go forward, I believe that it will affect startups and companies which issue stablecoins instead of the end user.

In case stablecoins were to fail because of fierce regulations, we could always resort to cashing out our coins into Fiat.



While regulation is good for the investor or consumer, too much of it can cause harm to the entire industry. Unfortunately, this has been the norm ever since Bitcoin was adopted by people in the mainstream world by 2017. Governments are afraid that crypto will take over the current financial system, which has led them to impose strict regulations to slow its growth. They have announced stablecoin regulation, mostly because of Facebook's announcement of Libra. Be aware though, that governments are able to do as they see fit in order to cripple crypto and Blockchain tech as much as possible. If they're able to successfully regulate stablecoins in their entirety, then their next target would be Bitcoin and other cryptocurrencies on the market. It'll be survival of the fittest as governments devise new ways to restrict the growth of stablecoins and crypto in general.

This stance would change, if governments would apply friendly regulations towards the aforementioned digital assets. But we all know, that government's intention is to minimize crypto's influence over the current financial system (Fiat) than anything else. Time will tell us what will be the outcome of stablecoin regulation across the crypto market. Let's just hope everything turns out to be good for these digital assets for the benefit of the market in its entirety. Just my thoughts

Regulating stablecoins is, imo, definitely a good idea, it was nothing short of retarded how many are popping up this last year
These "teams" have no idea how hard it is to actually run a stableoin, let alone whether or not their use case even NEEDS one, they are just following hype
I fear people really ARE losing money to these.  Cases like this remind me regulation CAN be good, imagine how Libra would have went :O

At present exchangers such as Binance already trade fiat money directly and I think this will change the stable coin in the future. Stable coins were originally made to facilitate transactions because banks forbid crypto transactions but if exchangers are able to directly trade fiat money with cryptocurrency, I think people will prefer this method because it is cheaper

Perhaps this regulation will cause projects that claim to be backed up, such as USDT, as they should be. However, this may cause some projects and regular stablecoin users to hit the wall. Projects will face stricter rules, which will surely affect its users too. It is best to wait, and see what the rules are like and are opposite which side.

Government try to take control this financial instrument with their policy and that's their duty. Country must protect their financial economy but also accept with wisely new idea ( system/ technology ) that can be use for economy purposes. Regulations have to purposes, manage and protect ( law ), built for society and have taxes for country. Just see the process and I hope both side has fair gain.

Isn't it regulated already which is why they were trying to check USDT of bitfinex?

Bear in the past 2 years, you wouldn't really consider crypto to be a safe-haven for investors to keep their money for it can be stolen just like keeping it in a bank. Look how much regulation had done to the market, a year of bull and maybe 5 years of bears or probably even forever this time.

TBH, I'm sure regulation is going to show weaknesses of stablecoins. With no institutional clearing house to support large volumes, they'd collapse or at least would not be able to serve the number of people the do today. Regulators could bring any stablecoin to its knees if they so desired. If it's backed in FIAT, it's just as sizeable, no matter how tokenized.

Governments (especially the US) have recently announced that they will be regulating stablecoins within the mainstream world. This has been a result of Facebook's Libra stablecoin announcement which has kept many governments worried about digital currencies taking over the existent financial infrastructure. If they start regulating stablecoins, you can expect the growth of the crypto industry to start slowing down at an unprecedented rate. These digital assets have been a safe-haven for many investors worldwide looking to protect their capital in crypto's volatile prices across the market.

Considering that the US is a country with strict regulations against crypto and Blockchain technology, they might become a headache for mainstream businesses and companies looking to provide stablecoin solutions for US customers. While crypto is in fact decentralized, it still depends on the government's approval to succeed within the mainstream world. Nobody would use something that is declared "illegal" despite being possible to use it regardless of imposed regulations from worldwide governments.

Do you think regulating stablecoins is a good idea? What are the future implications of stablecoin regulation?