Crypto Community Rejects Tether Regulation Proposal of the US Government

The US government has rolled out a regulatory proposal entitled Stable Act. The objective of the act is to regularize stablecoins that could challenge fiat currency.

Conditions of Bill

The crypto community is not happy with the latest proposal of the government as it could pose a serious threat to the sector.  If the recommended policies implement, the billion-dollar industry could result in nothing. The bill makes it necessary for all stablecoins operators to get a banking license and a proper registration with concerned authorities.

As per the conditions of the bill, the Federal Reserve will control the reserves of the companies, which could undermine the authority of the firms. What’s more, stablecoin operators will have to seek approval from the central bank for issuance.

Dragonfly Research recently reported that policies included in the new bill could end the existence of Tether.  “Make no mistake: the day that Tether gets taken down will be apocalyptic,” it stated.

In terms of market capitalization and usage, Tether is the leading stablecoin as its market cap has jumped from $4.1 billion in January to the current value of $20.9 billion. What’s more, its supply has also jumped 410% since the beginning of 2020.

USDT is Anti-Inflation

In countries where inflation is high, USDT benefits investors and traders in avoiding losses due to high inflation. After the Coronavirus pandemic, central banks of several countries have printed a lot of money to curb the negative effects of the pandemic on the economy. Due to loose bank policies, a lot of investors used USDT to enter crypto markets. As a result of broad exposure among the ranks of traders and investors, the market value of Tether has increase manifold.

The research further explained that the downfall of Tether is the downfall of the entire crypto industry. “Crypto markets will seize, exchanges will be thrown into disarray, millions of crypto traders will likely have their assets frozen, and prices everywhere will plummet,” the research stated.

The Stable Act on the part of the US government is just a proposal, and it is not a final decision. The proposal, however, receives harsh criticism from famous crypto personalities who are not willing to accept it at any cost.

Recent recommendations from the Presidential Working Group also highlighted the issue of stablecoin regulation. It seems that the US government is serious about regulating stablecoins.

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