The Overregulation of Stablecoins | Finance Magnates

 

Stablecoins are probably the hottest topic on the crypto market at the moment. It does not surprise me at all, as we all saw their incredible growth in 2020 under the DeFi market influence. The total value of stable coins has surpassed $30 billion, which reflects the high institutional and retail demand in unstable times.

Stablecoins are the tokens on public blockchains that are backed by fiat, their value is tightened to the conventional currencies such as USD or EUR. The key value is the minimization of the volatility that the crypto market is well-known for. Currently, there are more than 200 stablecoins, and USDT has the biggest market cap. The market capitalization of USDT has surged over 4 times since the beginning of 2020 and now it accounts for about ¾ of it.

At the beginning of December, the US Congress introduced a new bill – STABLE ACT, obliging issuers of stablecoins to obtain banking licenses and regulatory approval. In essence, this law obliges stablecoin issuers to…


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