The STABLE Act: A Threat to Tether, Stablecoins, and the Future of Altcoins?

[TokenTactician24]

The STABLE Act: A Threat to Tether, Stablecoins, and the Future of Altcoins?

If this bill goes through, only insured banks could issue stablecoins, putting Tether and others under serious pressure and potentially shaking up crypto market liquidity.

Altcoins could take a hit too—many rely on stablecoins for trading and liquidity. If regulators tighten the grip, should we bet on decentralized alternatives or see stablecoins forced into compliance with banking laws?

Is this regulation protecting the market or killing innovation?

[TomPluz]

Regulations can kill or foster innovations depending on how politicians will be wielding this power...but I have more faith that under the administration of Trump there will be more openness and more innate understanding of the cryptocurrency industry including stablecoin. The bill is not yet approved and signed by POTUS so there can still be a big chance that stablecoin operators can present their sides for accommodation so that the final law can be more balanced and be acceptable by all parties involved. While I understand that fear of regulations, at the same time we can never continue operating under the laws of the Wild, Wild West however we must demand more transparency and more robust communications from all side of the isles.

[bitterguy28]

The STABLE Act: A Threat to Tether, Stablecoins, and the Future of Altcoins?

More details here: https://coingeek.com/us-lawmakers-advance-stablecoin-legislation-with-new-bill/

If this bill goes through, only insured banks could issue stablecoins, putting Tether and others under serious pressure and potentially shaking up crypto market liquidity.

did i misunderstand the article or you did? because this is a direct quote from the article: Among other measures, the STABLE Act empowers the Office of the Comptroller of the Currency (OCC)—a federal agency that regulates and supervises national banks and federal savings associations—to regulate nonbank stablecoin issuers.

it does not say that only banks can issue stablecoins but it does say that you have to get permission to issue a stablecoin it does not say that you have to be a bank to do so as long as your stablecoin will be backed by cash and encouraged even more if it is the us dollar

[Faisal2202]

Altcoins could take a hit too—many rely on stablecoins for trading and liquidity. If regulators tighten the grip, should we bet on decentralized alternatives or see stablecoins forced into compliance with banking laws?

Is this regulation protecting the market or killing innovation?

So a stable act can be a bad thing for stable currencies as it will require all of them to have a bank charter, and people using decentralized platforms (defi) are at risk due to this bill! I mean, how is that going to effect Defi sector, a chart means the issuer of these stablecurrencies has to comply with all the rules of the banks, means they can trace each dollar right?

And in Defi sector there are many stable currencies, and the most of defi sector is running on loan and borrow sector AFAIK and they will not be hurt if their issuers will apply for this bank charter and get approved because this will increase their credibility and the number of stable currencies will decrease in the market which will increase the centralization but still not a big step toward decentralization.

[yhiaali3]

I don’t expect there to be any risk to Tether and other stablecoins like Coinbase’s USDC stablecoin because they are strictly in compliance with US laws, especially anti-money laundering and anti-terrorism laws.

For me, it’s okay if these centralized stablecoins are shut down because I don’t believe in them in the first place and I think decentralized stablecoins are much better. The main problem is that decentralized stablecoins are not as widely used as centralized stablecoins, but that won’t be a big deal.

[MrSpasybo]

Regulations can kill or foster innovations depending on how politicians will be wielding this power...but I have more faith that under the administration of Trump there will be more openness and more innate understanding of the cryptocurrency industry including stablecoin. The bill is not yet approved and signed by POTUS so there can still be a big chance that stablecoin operators can present their sides for accommodation so that the final law can be more balanced and be acceptable by all parties involved. While I understand that fear of regulations, at the same time we can never continue operating under the laws of the Wild, Wild West however we must demand more transparency and more robust communications from all side of the isles.

Yeah, I'd only be worried if this law was built under Biden, but now it's Trump term - America first crypto president. Tether knows what they need to do to comply with the law, and lawmakers also know what is needed to be able to support the crypto market in this country. Destroying USDT does not benefit America, the monopoly advantage of USDC is not good for crypto.

Tether is holding over $100B in treasury bills, USDT is also a tool to expand the influence of the $ around the world in the new era of payments. I'm not too worried about Tether and USDT, the US government will consider itself to ensure the best future for their crypto industry.

[yhiaali3]

Decentralized stablecoins are a great alternative, but adoption is their biggest challenge. Do you think DeFi-native stablecoins like DAI or LUSD can fully replace USDC and USDT in liquidity and stability, or will the market always lean toward centralized solutions for convenience?

It is very difficult at the moment for decentralized stablecoins like DAI or LUSD to replace USDC and USDT, as you mentioned people are always looking for convenience so they prefer the more popular centralized stablecoins that provide them ease over decentralized stablecoins although they are more secure.

But these circumstances may change in the future if governments ban centralized stablecoins or impose more stringent restrictions on their use, this may make people resort to using decentralized stablecoins.

[Bobcrypto]

in my opinion, I think that the regulations on stable look like attempt from the banking sector, through the government to clamp down on the increasing demand for cryptocurrency, a hindrance and deviation by banks and financial institutions to frustrate users. It is way to reduce the impact of crypto stable coins dominance over faits.
Many crypto enthusiast will get to understand that banks are not getting it easy with the growing developments of cryptocurrency stable coins over the last couple of years. Obviously, Fiats may suffer increasing lact of interest in the future as crypto stable coins continue to strive as the most preferred digital assets.

[Pirate]

This proposed bill would create significant turbulence in the industry. Such legislation would severely harm the stability of both Tether as well as other stablecoin providers operating exclusively through insured banking institutions. The implementation of this bill would create significant trading challenges for altcoins since they operate through stablecoins. The interpretation about this bill depends on your standpoint as it defends stability for some while others view it as retrogressive for innovative growth.

[NotATether]

I think this is just the US's answer to the MiCA regulations.

If you recall, the EU made these regulations some time ago in order to put a lock on the stablecoin market (under the guise of safety). This basically forced Tether and MakerDAO out of business in Europe. Only Circle for some reason is able to issue their own stablecoin USDC.

If this hits, all these altcoins will go to freefall, and perhaps even some stablecoins get unpegged.

[Bobcrypto]

I don’t expect there to be any risk to Tether and other stablecoins like Coinbase’s USDC stablecoin because they are strictly in compliance with US laws, especially anti-money laundering and anti-terrorism laws.

For me, it’s okay if these centralized stablecoins are shut down because I don’t believe in them in the first place and I think decentralized stablecoins are much better. The main problem is that decentralized stablecoins are not as widely used as centralized stablecoins, but that won’t be a big deal.

Interesting take! If centralized stablecoins like USDC remain compliant, they might avoid immediate risk, but regulatory shifts can be unpredictable. Governments could still impose stricter controls or limit access, which would shake the market. 

Decentralized stablecoins are a great alternative, but adoption is their biggest challenge. Do you think DeFi-native stablecoins like DAI or LUSD can fully replace USDC and USDT in liquidity and stability, or will the market always lean toward centralized solutions for convenience?

I am yet to understand some of these immediate risks you thought to be associated with these centralized stable coins. I think that regulations shouldn't be a witch-hunts or regulators trying to take the centralized stable coin issuers unawares. There should be openness in all this laws or regulations.
In my opinion, Centralized stable coins will remain a dominant force on the crypto economy, and may continue to be generally in use across exchanges. Decentralized stable coins are good alternatives but has a long way to go in terms of awareness and adoptions.

[yhiaali3]

In my opinion, Centralized stable coins will remain a dominant force on the crypto economy, and may continue to be generally in use across exchanges. Decentralized stable coins are good alternatives but has a long way to go in terms of awareness and adoptions.

Yes, there's still a long way to go for decentralized stablecoins to replace centralized ones, and the same can be said for DEXs to replace CEXs.

I believe the same reasons people prefer centralized exchanges over decentralized ones are also the reasons they prefer centralized stablecoins over decentralized ones. I mean, people are generally lazy, so they prefer services that are easier to use and more widely used.

[NotATether]

I believe the same reasons people prefer centralized exchanges over decentralized ones are also the reasons they prefer centralized stablecoins over decentralized ones. I mean, people are generally lazy, so they prefer services that are easier to use and more widely used.

But there is just one problem here and it's that decentralized stablecoins are just as easy to buy and sell as centralized stablecoins.

As far as a user is concerned, there is absolutely no difference between DAI and USDT, except one is accepted in much more stores than the other.

I guess that should make it clear why DAI and others have an uphill battle to fight.

[yhiaali3]

As far as a user is concerned, there is absolutely no difference between DAI and USDT, except one is accepted in much more stores than the other.

I guess that should make it clear why DAI and others have an uphill battle to fight.

Yes, unfortunately, that's the case. We're facing a problem here because people may not realize that decentralized stablecoins are the same as centralized stablecoins and even surpass them in terms of decentralization and privacy.

It's human nature; people don't like to deviate from the norm. They're used to USDT, so they don't want to exchange it for any other stablecoin, despite the many red flags surrounding USDT.