The Democrats in the United States reacted harshly to the Stablecoin bill presented by Republicans. They argue that the bill provides an advantage for Elon Musk and major technology companies, and has risks for individual investors and national security.
Criticism of the Stablecoin Law
The members of the Democratic Party call the Stable Act, which was prepared under the leadership of Republicans, as an arrangement that eliminates the line between banking and trade. Democrat Maxine Waters, who worked at the Financial Services Committee of the House of Representatives, said that the bill has given major technology companies the authority to create their own currencies. According to Waters, this will allow companies such as Elon Musk’s Platform X to remove their own stablecoins.
At this point, the past Facebook’s Libra initiative was reminded. Facebook (Currently, META), has aimed to transform global payment systems with its stablecoin project Libra. However, the project failed due to the concerns of the regulators about financial privacy and stability and was later transferred to Silvergate Bank. Silvergate went bankrupt in 2023.
Is the democrat’s attitude towards digital assets changes?
During the 2024 election campaign, the crypto industry’s donation of more than $ 130 million seems to have caused a softening in the attitude of the democrats against digital asset regulations.
For example, many Democratic deputies have recently acted with the Republicans and canceled the regulation of the Biden administration, which has obliged to authenticate customer to defi platforms. This was considered an important victory for the crypto community.
However, Waters opposed the Stablecoin bill and showed that democrats would not move away from the line of protection of investors.
Can large technology companies dominate the Stablecoin market?
Democratic representative Stephen Lynch said that the Stablecoin bill will allow major technology companies such as Apple and Meta to become stablecoin exporters. Lynch also criticized that the bill allowed stablecoin exporters to be controlled at the state level instead of the federal.
He argued that this would lead to a regulation race to attract stablecoin exporters among the states, that is, leading the regulations to be loosened.
Support from Republicans to Draft Law
Although the Democrats opposed the bill, the fact that the Republicans have the majority in the Congress both in the House of Representatives and in the Senate increases the likelihood of the bill.
In addition, President Donald Trump also promised to provide “regulatory clarity ında in Stablecoin and crypto arrangements. Trump’s launch of his memecoin in January once again revealed his interest in the crypto industry.
Some crypto investors and experts argue that crypto arrangements should not be an inter -party issue. Anthony Scaramucci, Bitcoin supporter and investment fund manager, said democrats can support a well -prepared law bill.
Waters, on the other hand, criticized the exclusion of the Republicans’ democrats, recalled that they had prepared a two -party stablecoin law with Patrick Mchenry last year.
Can the Stablecoin law increase the power of US dollar?
Republican representatives argue that the Stablecoin bill will strengthen its position as a global reserve currency of the US dollar. Tennessee representative Andy Ogles said that money transfer transactions in the US are one of the most expensive G20 countries.
Ogles also emphasized that stablecoins based on foreign currencies such as Chinese Yuan (Renminbi) or Russian rubles may become more effective in the market if the arrangement is not made.
Central Bank Digital Currencies (CBDC) Discussion
While the Stablecoin draft law was discussed, the issue of the Central Bank Digital Currency (CBDC) came to the agenda.
Republican representative Tom Emmer presented a bill that banned CBDCs last week. EMMER claimed that the Central Bank digital currencies could be a supervisor controlled by the government and threatened individual freedoms.
Democratic representative Brad Sherman, on the other hand, opposed EMMER’s proposal, saying that CBDCs offer a public alternative against stablecoins.
Sherman stated that the main purpose of the stablecoins is to ensure that the “crypto brothers” earn money and that they do not want private Stablecoin exporters to gain much strength in the financial system.
The Stablecoin bill has led to a major decomposition between parties at the US Congress.
- The Democrats think that the bill gives more authority to major technology companies and puts individual investors at risk.
- Republicans argue that the regulation will be positive for the US economy and that the stablecoin market will grow and strengthen the global position of the US dollar.
Although the majority of the Republicans in the Congress seem to have a high chance of enacting the bill, the opposition of the Democrats shows that new regulations may come to the agenda in the future.
