A few days ago, Congress considered regulating Stablecoins as part of their plan on cryptocurrency regulation. Today, a member of Congress has called the attention of the house to a coin. When Stablecoins is mentioned, this coin is always overlooked, Tether.
Warren referred to Tether as a bomb in his discussion with The Block. The representative believes that Stablecoins pose a significant financial risk to the economy.
The Transparency Policy Of Tether
According to him, the company behind Tether stated they have a commercial paper which nobody knows the content of. There is no disclosure or transparency as a framework that coerces disclosure is not in the best interest of investors.
In connection to a recent action taken by the SEC, Davidson urged the enforcement agency to stop chasing XRP and aggregate their time and attention to Tether.
One would think that Davidson is not a fan of cryptocurrency, but the opposite is true. As it pertains to matters on cryptocurrency, the representative is not a false alarmer. He has been a strong advocate for the crypto community since he became a congressman in 2016.
Warren Davidson belongs to the House Financial Services Committee where the Committee is reviewing the report submitted by the PWG (President’s Working Group). The information was centered on the financial market and Stablecoins. Nellie Lang, the undersecretary of the Treasury for Domestic Finance, is the one that will guide the hearing.
The Appeal Of PWG
The President’s Working Group is asking Congress to limit the issuance of Stablecoins to banks. The appeal of PWG was met with disapproval and disagreement from house members. For instance, Davidson did not welcome the idea of restriction to banks.
Still, there has not been any news concerning the regulation of Stablecoins. While the matter persists, Tether, which is the largest out of the Stablecoins, remains the big issue at hand. Many people have widely criticized the operator for its transparency policy. Also, during discussions involving Stablecoins, Tether has never been mentioned.
The chairman of the Senate Banking Committee, Sherrod Brown, met with some issues when he tried reaching out to Tether concerning its practices.
Currently, Tether is in a legal battle with CoinDesk. The issue concerns a situation with the Attorney General of New York. The outcome stopped the operation of Tether. Also the exchange firm, Bitfinex was also stopped from further operation in the state.
One of Tether’s representatives, while talking to TheBlock, disclosed that since Bitfinex is not operating in America, he cannot speak with journalists based in the United States.