Altcoins Talks - Cryptocurrency Forum
Cryptocurrency Ecosystem => Stable Coins Forum => Topic started by: Malam90 on February 21, 2021, 03:29:50 AM
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If the U.S. reins in pseudonymity in stablecoin transactions (as seems possible) there could be big implications for the crypto industry, says our columnist.
Imagine the following scenario: Sometime in 2021, financial regulators declare that all stablecoin owners must be verified. What would happen to the cryptocurrency ecosystem?
Right now, a large chunk of stablecoin usage is pseudonymous. That is, you or I can hold $20,000 worth of tether or USD coin stablecoins in an unhosted wallet (i.e., not on an exchange) without having to provide our identities to either Tether or Circle, the managers of these stablecoin platforms. We can send this $20,000 along to other users, who can transfer the coins on, who in turn can transfer them on, and no one along this chain needs to unveil themselves.
J.P. Koning, a CoinDesk columnist, worked as an equity researcher at a Canadian brokerage firm and a financial writer at a large Canadian bank. He runs the popular Moneyness blog.
The only point at which stablecoin users have to submit to a Tether or Circle know-your-customer (KYC) process is to redeem stablecoins directly for traditional bank dollars. Or vice versa, to deposit dollars with Tether or Circle and get freshly minted stablecoins. Let me speculate about how a potential unveiling might look.
FinCEN could rule that henceforth, if anyone wants to access tether, USD coin, or any other official stablecoin (TrueUSD, Paxos standard, Gemini dollar, Binance USD, HUSD) they will need to apply for a verified stablecoin account. That would mean providing photo ID, proof of address and other information to Tether, Circle or other issuers.
For many existing stablecoin owners, this won’t be a big deal. Professional arbitrageurs who use stablecoins to move value from one centralized exchange to another are probably already KYC’d. And retail clients who keep their stablecoins on an exchange like Binance wouldn’t see any changes because the exchange already verifies their identities anyways. Source (https://www.coindesk.com/what-happens-if-all-stablecoin-users-have-to-be-identified)
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It will be very good decision cause need a validity of Govt Organization.If they do it it will be validity of legal way.so i will tell all investor and trader will do Users documents for legal validity personally i support it for legality.
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Stable Coin is Also Cryptocurrency so If Government Identify it’s Users it will Be Very Hurtful for Cryptocurrency Users i Think. When Legal Agency Identify Stable Coin's Use4s Then They will Able To Identify Others Cryptocurrency Users. So It Can Break our traders and Investors Privacy.
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After reading the whole article, i get this: If anyone wants to convert their traditional USD dollar into USDT ( Tether or stablecoin, than government might apply kyc for that user. Likewise, anyone might need to go through this whole kyc process if he/she wants to convert their stablecoin into fiat coin which is good for monitoring those users, IMO. But i don't think that other users who are using dex for converting their ETH into USDT or USDC or any stablecoin, might not need to go throughout the kyc proccess. TBH, it's really great thing for us who are using any kind of stablecoin without minting or converting into traditional fiat currency through bank or other way.
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I totally agree with you because indeed whatever happens to this stable coin must be protected by regulations from the government in order to guarantee the funds owned by traders and investors.
This system is like normal Fiat but cryptocurrency also needs to learn from FIAt because cryptocurrency should receive security protection from the government, especially for stable coins.