Schlimme things will happen if stable coins will not be regulated soon

A high-ranking Republican has raised the alarm because of the rapidly growing stablecoin industry and warned that the money will "pass" the money if it is not regulated soon.

Pat Toomey, the top Republican in the Senate Banking Committee, said that he thinks the congress should write new rules for the 180 billion dollar market for stable coins that are among the most popular cryptocurrencies in the world.

But he defended himself against some of the stricter measures that are promoted by Democrats, which believe that stable coins are now worth so much money that their operators such as banks should be regulated.

toomey said the Financial Times in an interview: "Could many individual consumers get severe burns? Absolutely. Would that be a bad thing? Yes, it would be bad for these consumers. It would also be a bitter setback for the industry.

"For these two reasons I would like to create a reasonable framework before something bad happens. And let's be honest, some bad things will happen at some point - after all, this is still a relatively new technology."

Stablecoins differ from other cryptocurrencies such as Bitcoin or Ethereum in that they are covered by real currency and offer investors the opportunity to have digital assets with the promise of additional price stability.

The financial supervisory authorities are concerned about how quickly the cryptocurrency grows, how many are in circulation and how little clarity is about the assets that they support.

tether, the most popular coin, has grown from a market capitalization of around $ 4 billion to $ 83 billion now from USD. The supervisory authorities previously fined the company with a fine in the double -digit millions because it had given incorrect information about its reserves. There is currently an indication of sufficient reserves to cover 100 percent of the coins he has issued.

The bid administration wants to restrict the market in such a way that only nationally regulated financial institutions can issue stable coins, a rule that would exclude both Tether and USD.

The draft law of TOOMEY would also enable other organizations to offer the coins if they publicly disclose their reserves every month and undergo an exam every three months.

"The idea that the only permissible issuers should be insured institutions is far too restrictive," said Toomey. "There is no logical reason for the world why you have to be an insured deposit institute."

The step to regulate stablecoins is part of a wider push of Democrats and Republicans to introduce rules for the entire cryptocurrency industry. But the Republicans oppose some of the tougher suggestions from high -ranking Democrats such as Gary Gensler, the chairman of the Securities and Exchange Commission, who has argued that many cryptocurrencies should be regulated in the same way.

toomey struck Gensler and said: "He tries to use the enormous power he has and to use enforcement measures in order to force an industry to do what it wants. So you absolutely not deal with a new technology."

He also criticized the Democrats for trying to use the Federal Reserve to accelerate the transition to green energy.

toomey was one of several senators who contributed to blocking Sarah Bloom Raskin's nomination to the Fed's Governor Council of the FED after they had questioned their demands on the regulatory authorities to consider climate change when taking into account economic risks.

"Here in the United States there is a movement that uses the threat from climate change as an opportunity to start the process, to get the Fed to withdraw capital of carbon -intensive industries in order to accelerate the transition to a low -carbon economy". "That lets my head explode."

he called it a "public conspiracy" of the Democrats to contain climate change with means that were not developed for this task.

toomey, one of seven republican senators who voted in his second office for the conviction of former President Donald Trump in his second office. The change has led to a bitter struggle for his seat, with the two leaders being the television personality Mehmet Oz and the Hedge fund boss David McCormick.

oz is one of more than 100 candidates supported by Trump, including JD Vance, the author and risk capital provider who won his hotly contested race as a Senator of Ohio this week.

Despite this victory, however, TOOMEY insisted that the influence of the former president on the party.

"He has very often tried to ensure that he will choose the horse that will win so that he can later calculate the victory that would happen anyway and can brag about the enormous profit/loss record," said TOOMEY.

“Firstly, he won't win everywhere - I think there are a number of top -class cases in which he will probably not prevail. And secondly, people are not stupid. You know what is going on here.

"I think his influence will continue to decrease - which in my opinion is already the case."