Any decentralized stablecoin out there?

Published Dec 7 2020

Written By Kristine Thomassen

The answer to this question is a yes. But first, let’s take a look at why we need to care about decentralization, again. On Dec. 3rd 2020 a bill was introduced to the US Congress regarding stablecoins:

“It shall be unlawful for any person to issue a stablecoin or stablecoin-related product, to provide any stablecoin-related service, or otherwise engage in any stablecoin-related commercial activity, including activity involving stablecoins issued by other persons, without obtaining written approval in advance, and on an ongoing basis, from the appropriate Federal banking agency, the Corporation, and the Board of Governors of the Federal Reserve System.”

For anyone who has been following the regulatory initiatives targeted stablecoins, this should come as no surprise. The US is no longer known for embracing and nurturing innovation. The bill means that issuers of stablecoins would be regulated like banks and any issuer providing stablecoin services would have to follow banking regulations. This would have serious consequences for stablecoins that are not either completely decentralized, fully compliant or easily can adjust to either side.

Another document one must pay attention to, was released on Oct. 13th 2020 by the international body, the Financial Stability Board (FSB). It came out with 10 high-level recommendations for regulation, supervision and oversight of “global stablecoin” arrangements. FSB’s goal is to…