WASHINGTON, D.C.—Benjamin Schiffrin, Director of Securities Policy, issued the following statement in connection with Better Markets’ new Fact Sheet, “Three Questions for Any (Un)Stablecoin Legislation,” released ahead of a Senate Banking Committee hearing entitled “Exploring Bipartisan Legislative Frameworks for Digital Assets”:
“Today, Congress will hold a hearing dedicated to crypto, including so-called ‘stablecoins.’ But they should really be called unstablecoins, because they have so often proved to be unstable and to be susceptible to bank-like runs, just like money market funds. And although proponents promote stablecoins as a method of payment, so far they are mostly used to facilitate crypto trading and to perpetrate criminal activity.
“That is why anyone evaluating the proposed stablecoin bills that have been introduced in Congress should consider three main questions:
- Does the legislation provide adequate protection against the risk of a run?
- Does the legislation protect against the need for a government bailout?
- Does the legislation account for the use of stablecoins in criminal activity?
“As we’ve said before, when considering (un)stablecoin legislation, regulators and policymakers have to consider the risks to investors, consumers, and the economy, which is why answering these three questions is so essential to protecting the American public.”
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