US Competitive Advantage At Stake If Congress Bans Stablecoin Rewards, Coinbase Policy Chief Says

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The U.S.’s competitory vantage is astatine involvement successful the statement implicit whether to let rewards connected dollar-pegged stablecoins, Coinbase (NASDAQ:COIN) argumentation main Faryar Shirzad says.

“If this contented is mishandled successful Senate negotiations connected the marketplace operation measure it could manus our planetary rivals a large assistance successful giving non-U.S. stablecoins and CBDCs a captious competitory vantage astatine the worst imaginable time,” Shirzad said connected Dec. 30 connected X, citing a Bloomberg study connected China’s determination to wage involvement connected integer yuan holdings.

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“Lobbyists for entrenched incumbents volition ever combat change,” helium continued. “It’s captious for negotiators to support the primacy of the U.S. dollar and the U.S. fiscal system, not conscionable incumbent interests.”

The People’s Bank of China connected Dec. 29 said it would commencement paying involvement to integer yuan holders opening Jan. 1 successful the latest effort to thrust adoption of the alleged Central Bank Digital Currency. Whether the determination offers a compelling inducement for adoption oregon ditching the dollar, however, is unclear, arsenic China’s involvement complaint connected request deposits astir precocious sat astatine 0.05%.

The U.S. enacted the GENIUS ACT successful July, offering guidelines for the issuance of stablecoins successful the country. The instrumentality prohibits issuers from sharing profits with holders successful the signifier of involvement payments. However, the manufacture recovered a workaround done cryptocurrency plus work providers specified arsenic Coinbase, which connection involvement successful the signifier of rewards, overmuch to the chagrin of the banking establishment.

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As negotiations for the Senate’s highly anticipated marketplace operation authorities stitchery momentum, banking groups person urged lawmakers to adjacent the loophole successful the GENIUS Act. They mention deposit formation risks to assemblage banks, which could wounded their lending abilities.

The Blockchain Association, meanwhile, has said that claims that stablecoin rewards could wounded assemblage banks deficiency evidence. The radical besides said modifications to the GENIUS Act earlier its afloat implementation would wounded the certainty that typically follows Congressional regulatory acts.

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The anticipated marketplace operation measure is expected to specify which cryptocurrencies are commodities and which are securities. The measure has faced respective delays, including the government’s grounds shutdown past year. However, White House crypto czar David Sacks successful December expressed optimism that the authorities would marque advancement this month.