import to read: The Beginners Guide to Crypto Currency Exchange
US Senate Banking Committee asks stablecoin issuers
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| United Stats cryptocurrncy |
The US Senate Banking Committee has sent letters to Coinbase, Tether, Paxos, Gemini, Binance.US, Trusttoken and Centre. What do these companies have in common? The common denominator is that they all issue stablecoins pegged to the US dollar.
Will the US government conduct a serious investigation this time? Probably not, judging by the questions they ask, but they might make a statement on the first day of November.
The Chairman of the Senate Banking, Housing, and Urban Affairs Committee, Senator Sherrod Brown, issued a statement.
The statement came in response to the report of the Presidential Working Group on Financial Markets, on stablecoins:
The report released today by the Presidential Working Group highlights the risks that the rapid growth of stable currencies poses to households and the economy. We must work to ensure that any new financial technologies are subject to all laws and regulations that protect investors, consumers and markets, and that they compete on an equal footing with traditional financial institutions.
Less than a month later, on a more aggressive tone, Senator Brown said:
Send letters to stablecoin issuers and exchanges, seeking information on how companies are protecting consumers and investors.
Tether FUD
Let's not kid ourselves, the US government has had its eye on Tether for a long time, and although the company now produces a report from an accounting firm on a regular basis, the attack continues.
A few months ago, there was a rumor that some Tether executives might face a criminal investigation into allegations of bank fraud.
Last month, company officials paid a $41 million fine to the US Commodity Futures Trading Commission, however, this time the focus appears to be on all stablecoin issuers.
Is there a reason for this? Does it have anything to do with CBDCs? Let's move on to the documentation.
Read also: CBDC Digital Currency: Origin, Objectives and Countries Involved
What does Senator Brown want to know about stablecoins?
Although the actions of the US Senate Banking Committee appear assertive, they are testing the fundamentals.
On countless occasions, all stablecoin issuers have answered the six questions posed to them in the message they received.
And they do not ask the million-dollar question, where is the money that returns all the currencies it issues? This is the crux of the matter, isn't it?
The US Senate Banking Committee asks stablecoin issuers to “describe the underlying purchase, exchange, or minting, and details of the process for redeeming USTC and receiving US dollars.”
And they ask, “How many tokens were issued by the US Department of Defense, and how many coins were recovered?”
Then “describe the market or operating conditions that would prevent the purchase of, or redemption of, Tether for US dollars, or any other digital asset.”
It requested information on "any commercial platforms that have enhanced capabilities, privileges, or special arrangements."
Finally, they ask about studies “on how specific levels of exemptions can affect stablecoins.” This is their main issue, and Senator Brown admitted in the letter:
I am very concerned about the non-standardized terms that apply to redeeming certain fixed positions, how these terms differ from traditional assets, and how these terms may not be consistent across digital asset trading platforms.
None of these questions seem difficult to the stablecoin issuers, and they must have pre-written answers to most of them.
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| US Senate Banking Committee asks stablecoin issuers |
Stable coins are in direct competition with the Central Bank of digital currencies
Bitcoin and altcoins are not even related to central bank currencies, so although they are all digital, they exist in completely different fields and have distinct goals.
However, stablecoins serve a similar purpose to central bank currencies. Traditionally, governments do not like competition.
Is this the reason why the US government has expanded its investigation of Tether to all stablecoin issuers?
We will be sure in a few months, all governments seem to be underestimating their CCD plans, but don't deceive us, that central growth countries will come sooner rather than later.
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