United Texas Financial institution chief govt officer Scott Beck referred to as on members of the state's blockchain working group to suggest a coverage of handing stablecoins to banks moderately than crypto companies.
Talking on the Texas Work Group on Blockchain Issues in Austin on Friday, Beck proposed proscribing issuance of U.S. dollar-backed stablecoins to licensed banks moderately than issuers like Circle. The United Texas Financial institution CEO cited a November report by the President's Working Group on Monetary Markets by which the group stated stablecoin issuers ought to be held to the identical requirements as insured depository establishments, together with state and federal banks.
"If such stablecoins are outlined as 'cash,' then banks are the suitable financial actors to challenge and handle stablecoins," Beck stated. “Banks have the experience and authorized framework to deal with cash, and in contrast to right this moment's stablecoin gamers, banks are closely regulated at each the state and federal ranges.”
He added:
“Introducing stablecoin exercise into the banking sector and banning non-bank issuance of stablecoins will improve client safety and appeal to further assets and capital to this burgeoning space of financial exercise.”
The CEO of United Texas Financial institution addressed the Work Group on Blockchain Issues on the Texas Capitol on Friday
In response to a query from MoneyGram's working group member and Normal Counsel Robert Villaseñor, Beck claimed that not like banks, stablecoin issuers like Circle maintain belongings in "different establishments" and are "successfully withdrawing deposits from the banking business." He added that some stablecoins are significantly susceptible to runs, probably threatening the economic system ought to the market attain a sure dimension, and leaving issuance to banks to make sure know-your-customer guidelines are adopted.
Lee Bratcher, president of the Texas Blockchain Council and current on the listening to, questioned Beck's proposal as "anti-competitive." The financial institution CEO countered that one of many key variations between licensed banks and personal firms issuing stablecoins is that with the previous, the money behind the tokens would "sit with the Fed," which additionally ensures the funds are FDIC-compliant. be insured.
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Circle's USDC dollar-pegged stablecoin is reportedly 100% backed by money or money equivalents, together with financial institution deposits, Treasury payments, or business paper. The stablecoin issuer introduced in March that monetary establishment BNY Mellon will likely be answerable for custody of its USDC reserves -- greater than 52 billion cash in circulation on the time of publication.
The Texas Work Group on Blockchain Issues was formally fashioned in September 2021 following the passage of Home Invoice 1576. Based on the group's web site, their mission contains growing a framework "for the growth of the blockchain business in Texas and recommending insurance policies and authorities investments associated to blockchain know-how."
