Only Banks Should Issue USD-Pegged Stablecoins – Bank CEO
Scott Beck, the CEO of United Texas Bank, has asked members of the Texas blockchain working group to propose policies that would limit the issuance of stablecoins with banks. The CEO believes only US banks should be allowed to issue USD stablecoins.
Restrict The Issuance Of USD-Pegged Stablecoins To Banks – Texas Bank CEO
On August 19th, Beck addressed the Texas Work Group in charge of Matters on blockchain. The bank CEO suggested that they make policies to limit the issuance of USD-Pegged stablecoins to only licensed banks.
As a result, crypto firms like Circle and Tether should not have the right to issue such stablecoins. Also, Beck mentioned a report in November from the Working Group of the president on financial markets.
The groups stated that issuers of stablecoins must be treated the same way as insured depository financial institutions like state and federal chartered banks.
According to Beck, since stablecoins are referred to as money, banks are the only ones that should manage USD-pegged stablecoins. He said that banks have the legal framework and expertise to handle money.
Unfortunately, crypto firms issuing stablecoins are not well regulated like banks at the federal and state level. He added that:
“It is beneficial to limit stablecoins activities to licensed banks. Also, non-banks should.b3 prohibited from issuing USD-Pegged stablecoins. When this is done, it would improve protection of consumers and attract more capital and resources to the sector.”
Texas Blockchain Council’s President Calls Beck’s Proposal “Anti-competitive”
Meanwhile, the United Texas Bank received questions from various participants such as Robert Villaseñor, general counsel of MoneyGram, and members of the working group. Beck accused stablecoin issuers like Tether and Circle of sucking deposits from the banking sector.
He stated that such entities do not hold their assets at banks but other institutions. Beck also said stablecoins were susceptible to runs that could threaten the economic sector if the market continued to expand.
Furthermore, he said the KYC procedures of banks were stricter compared to crypto firms. However, a participant at the meeting challenged the CEO’s proposal.
Lee Bratcher, Texas Blockchain Council’s president, called Beck’s proposal “anti-competitive.” Beck replied by saying there is a huge difference between licensed banks and crypto firms issuing stablecoins.
Beck argued that for banks, the assets backing the stablecoins would be at the US Federal Reserve. Also, the FDIC insured such assets.
Meanwhile, the Texas Work Group came into existence last September after the Senate passed House Bill 1576. The group’s mission is to develop a framework for blockchain expansion in Texas.
Also, it has the right to suggest policies and conduct state investments on matters relating to blockchain tech.
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