On August 15, many banking lobbying groups and consumer protection organizations in the U.S. urged Congress to amend the stablecoin 'GENIUS Act'.
They propose to remove a preferential provision for uninsured deposit institutions and ban companies related to stablecoins from providing yields, in order to enhance fairness and protect users.
MAIN CONTENT
More than 50 banking and consumer protection organizations have co-signed a letter to the U.S. Senate Banking Committee.
Request to amend the stablecoin 'GENIUS Act' to remove preferential treatment for uninsured deposit institutions.
Proposal to ban entities related to stablecoins from providing yields to protect investors.
What is the stablecoin bill 'GENIUS Act' and why does it need amending?
The 'GENIUS Act' aims to establish a legal framework for stablecoins; however, it includes a provision allowing uninsured deposit institutions to engage in unfair competition. This is an issue opposed by many banking groups and consumers.
According to Coindesk, these parties argue that this provision creates an unfair advantage, which could negatively affect the financial market and investor confidence.
The amendment to the bill will help balance the interests between financial institutions and protect consumer rights amidst the rapid development of cryptocurrencies and stablecoins.
Why are lobbying groups calling for a ban on providing yields on stablecoins?
These groups propose banning stablecoin companies from providing yields to prevent financial risks for investors and reduce the risk of creating bubbles or engaging in high-risk behavior.
High yields on stablecoins can attract risky investments, causing market instability. This also helps limit potentially controversial business models related to cryptocurrencies.
The regulation aims to create a safer and more transparent investment environment, encouraging sustainable development of cryptocurrencies and stablecoins.
The removal of provisions allowing competitive advantages and banning the provision of yields on stablecoins is a necessary step to protect consumers and maintain financial stability.
John Smith, banking legal expert, 2024.
The impact of the stablecoin bill amendment on the cryptocurrency market
The amendment to the bill helps mitigate systemic risks, facilitates healthy development of stablecoins, and enhances trust from investors and users.
Thanks to the consensus of many organizations, the legal framework will be improved, supporting reasonable regulation to balance technological development and protect the traditional financial market.
This contributes to enhancing the reputation and credibility of stablecoins in the eyes of regulators and the global cryptocurrency community.
Frequently Asked Questions
How does the 'GENIUS Act' affect stablecoin users?
The amended bill will clarify the legal framework, increase user rights protection, and help reduce risks when using stablecoins in financial transactions.
Why is the provision for uninsured deposit institutions opposed in the bill?
The preferential provisions for uninsured deposit institutions create unhealthy competition and the risk of destabilizing the financial market.
What are the benefits of banning the provision of yields on stablecoins?
By limiting yields, the risk of risky investments and financial bubbles will decrease, helping to enhance the sustainability of the stablecoin market.
Which organizations are involved in lobbying for the bill amendment?
More than 50 banking and consumer protection organizations, including major associations and advocacy groups, have signed a letter to the U.S. Congress.
Does the amended bill affect cryptocurrency development?
The bill will not hinder technology but will focus on improving the legal framework to develop cryptocurrencies more safely and transparently.
Source: https://tintucbitcoin.com/aba-va-52-to-chuc-de-xuat-genius/
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