U.S. Bill Would Temporarily Ban Algorithmic Stablecoins Like HBD

in #hive-1679228 days ago

The politicians are taking action. We are seeing them make moves which proves what many were saying all along: decentralize or else.

A lot is being made of the latest cryptocurrency bill that is being negotiated in the United States Congress and for good reason. The government is making its attempt at reigning in the entire cryptocurrency industry.

At the top of the list are stablecoins. They made headlines earlier this year, especially with the implosion of TerraUSD. This sent shockwaves through the cryptocurrency industry as tens of billions were wiped out in a matter of a couple weeks.

This, naturally, got the attention of the politicians in Washington. Of course, they feel it is their responsibility to step up and save the financial system. After all, their track record is sterling in this area.

That aside, it does appear, if things progress as they are written now, that algorithmic stablescoins will be sidelined. The present bill being discussed proposes banning these for two years while federal agencies study them.

It is a move that would affect the Hive Backed Dollar (HBD). This also shows how important it is to keep working on decentralization.

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Source

Congress Putting Its Foot Down

Over the past half year, we saw a lot of discussion about stablecoins. They were obviously a target even though most of the politicians running their mouths have little idea what they are talking about. That aside, unfortunately, they have the power to make life very difficult and it appears they will.

This is going to affect exchanges the most. Those that are registered with the government are going to find their ability to engage with the different tokens clipped. It is likely we see the ability to use HBD on exchanges that operate within the United States eliminated with this bill's passage.

To illustrate how many in Washington feel about this topic, here is a sampling:

The stablecoin bill has been in the works for months, and has been delayed in the past, in part over concerns raised by Treasury Secretary Janet Yellen. Yellen has repeatedly cited the TerraUSD collapse when calling for more regulation of the crypto space.

Similarly, Rep. Waters highlighted the risks of stablecoins earlier this year, saying, "investigations have shown that many of these so-called stablecoins are not, in fact, backed fully by reserve assets," and that a lack of investor protections could even "threaten U.S. financial stability."

The threat to U.S. financial stability is a complete joke when uttered by these people. After what the banks have done with little to no recourse just shows how, at best, completely ignorant these people are. Of course, the flip side is that it could exemplify the corruption that surrounds these people.

By the way, the latter would not be that outlandish.

It seems the bill does address stablecoins pertaining to banks.

The stablecoin bill now provides a path for banks and other financial institutions to issue stablecoins, working with their existing network of regulators. But that network would now also include regulators at the state level, providing state-approved stablecoin issuers a 180-day fast track to a federal green light.

Source

Isn't that a slap in the face? They provide a pathway for banks to issue out their own stablecoins?

Now it appears the plan is becoming clear.

How Does This Affect HBD?

The question many might have is how does this affect HBD?

To start, if one is outside the United States, there is no change. Unless other governments adopt this same stance, this is only applicable to those within the U.S.

Also, it is going to target the centralized exchanges. Those are the ones who have to adhere to regulations. This means that any exchanges operating within the U.S. will have to drop any algorithmic stablecoins from their offerings if this bill passes and becomes law.

Fortunately, HBD is not listed on many exchanges so this is not really too much of an issue.

However, it does stress to an even greater degree what we discussed over the past few years. Unless we focus a great deal of attention on getting outside the reach of these governments, the entire industry is in trouble.

When it comes to HBD, we need to focus upon the decentralized path as much as possible.

There are some advantages already in place. For one, there is no centralized company or entity behind the coin. We have no figure to go after as is the case with TerraLuna. It would be difficult to issue an arrest warrant for those behind HBD since there is no individual or group.

Here is where true decentralization separates Hive from the rest.

At the same time, we did see some liquidity pools opening up with HBD derivatives. With pHBD and bHBD, there are a couple options already in place. We simply need to focus upon expanding the options while deepening what is there.

Another advantage is the internal exchange. Here again, Hive's decentralization is a savior. There is no way to limit or restrict what is taking place on there. The exchange operates based upon the node system that is set up. At present, there are over 120 different node operators spread all over the world who produce blocks on a rotational basis.

This means the internal exchange just keeps churning along, allowing people to swap HBD for HIVE.

Build Around The Regulations

We are seeing how this is unfolding. The politicians and bureaucrats in government are not going to stop. This is not isolated to a single, or even a few, countries. It is across the board.

For this reason, it is imperative that we get outside the regulation. Whatever they set down, we develop around. This is the lesson of the Eurodollar system. Here is where the bankers gave us the blueprint to follow.

Since blockchain and cryptocurrency are global in nature, this transcends any single government. This means that everything we do has to spread throughout the world, eliminating a single point of geographic vulnerability.

Another step that must be taken is to open source as much as possible, creating the possibility to duplicate everything. This is where another layer of defense enters. With open source software, it becomes like a game of whack-a-mole.

A final piece is to make decentralized finance (DeFi) truly decentralized. We have a system that is such in name only. Much of what is out there is built upon centralized infrastructure or has a lab/company behind it. Here is where we have to quickly tangent. Hive has a lot of developers who are simply creating software and putting it out there. This is crucial going forward.

Hive has a strong foundation. The base layer is not controlled by anyone one person. When we look at the block producers, no single one is producing more than 5% of the blocks.

For the last few years, this ecosystem flew under the radar. With all that is taking place right now, this is not a bad position to be in. The one benefit we have is that it is unlikely anyone with any power in Washington ever heard of Hive.

We can use that to our advantage.


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I have just one thing to say....

Molon labe

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It seems to me that this is a bit of bad news for crypto as well as unique stablecoins because of this it could also affect HBD.

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Similarly, Rep. Waters highlighted the risks of stablecoins earlier this year, saying, "investigations have shown that many of these so-called stablecoins are not, in fact, backed fully by reserve assets,"

Wait until she finds out banks have no reserve assets.

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I would love to see you try to explain to her balance sheet banking how the monetary system is simply a ledger.

That would be must see tv.

What is ironic is that crypto can be held by the masses and used in the general economy. Fed reserves are specific tokens only for isolated banks.

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Waters is a Zombie in her 105th term in Congress. She's just reading cards and going to wellness in DC.

Wait until she finds out she's an idiot. Wait, never mind, that'll never happen. She's one of the excuses for term limits - in Congress for thirty years.

This is so scary...

I don't know why but I feel the only good part of this is it doesn't really affect the hive blockchain.

I don't know about how USDT works but this could potentially harm most stable coin.

In Nigeria, most people who are crypto aware don't like using banks. With this information, I hope most stable coins don't lose their stability because this looks like the consequence in my head.

Anyways, lets hope they don't pull through.

As long as the crypto is asset backed, they feel it is okay. So USDC and Tether should be okay as long as they truly have their tokens backed by cash or cash equivalents.

Circle already filled for a banking license which is likely going to be the norm, at least in the US.

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Did you see my Tweet on this or did you find it somewhere else?
Gonna write a post about it as well.

It is likely we see the ability to use HBD on exchanges that operate within the United States eliminated with this bill's passage.

Yup...

This is what we signed up for!
Let the games begin.

Tha, they will cherry pick some and hut down the rest, there will be no equally applied ruling for another Eon.

This was a rather large story.

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so then you saw it somewhere else then?
I only ask because I saw no one talking about it,
one vague reference and i had to dig though the comments to get a source link
seemed like more ppl should have been talking about it

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Damn that sucks big time. The war is on. Now I guess most of the crypto project should start paying more attention in decentralization because governments will keep on coming

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Yep.

This is what the CTT talked about for most of the last year.

It is starting to come to fruition.

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It’s interesting see governments spend time talking about crypto. This is a sign crypto is doing something right. Now is time to develop harder and leave governments in smoke

The Eurodollar system shows us the answer.

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The ignorance these lawmakers exhibit is simply embarrassing for them to be representative of a state.
A lot to learn from the present year, from developers to users alike, the need to opt for complete decentralization is becoming clearer.

As usual, Hive will keep advancing like it never existed. Hive is like that invincible blockchain staying low-key to get stronger by the day.

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Well many support them. I am not sure the embarrassment is the politicians or the idiots who keep supporting both parties.

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This, naturally, got the attention of the politicians in Washington. Of course, they feel it is their responsibility to step up and save the financial system.

You mean it's their desire to protect the corrupt banking system from which they (the wealthy) benefit.

Depends upon which wealthy you mean.

You will have to be more specific. Many do not benefit off the bankers heists. They are a rather select group.

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It's only going to affect exchanges. As far as a citizen using it, they can kiss my ass, all up and down, lol. I am done. This is not a government that I support because they are not supporting the people, therefore will not abide by their so-called rules. Not just on this, but on an epic number of levels. I will keep stacking and using HBD. My businesses will continue to accept HBD, and we are moving @blocktunes over to using bHBD solely as a payment token, thus giving it more utility. And if/when I decide to start up a witness, it will NOT be hosted in the US, lol.

They are scrambling to trying a control and regulate everything, but it's all crashing down around them.

But yes... DECENTRALIZATION!!! This is such a huge factor, and a HUGE issue across many blockchains. In my opinion, the 2 that have the best chance against the government, are one, Hive on an open and transparent level, and Monero, due to it's privacy aspects and the fact that anyone can mine it on a CPU. It's the only true cypherpunk coin left in my opinion, lol.

You might be right about Monero. I dont know enough about it. That said, we have a lot of things brewing that are going to make it tough for the governments of the world to stop this.

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I know 0 people who lost money on Terra, because I don't associate with people who have low IQ standards for investing.

What if HBD was re-branded as 'Hive Balanced Dollar' or something like that and the definition of it changed from being a 'stablecoin' to it being a 'balancecoin'.

Fortunately for HBD it doesnt really matter.

Plus, the key is just to keep expanding it all over the place. Once the derivative start flowing, it becomes impossible to stop.

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Yeah, the more I thought about it the more I realized just how immune HBD is to such regulations.

Even Blocktrades is a company registered outside the US. I believe Dan said it in your podcast with Jon.

Yes be he operates under FINRA so he has to comply with the regulation.

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As DC loses more and more respect, they will get more and more tyrannical.

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There is truth to that. We are seeing a total collapse in confidence in government around the world. This is going to be problematic in many ways.

It is not going to be a pretty period.

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One currency to bind them all. Good, make Sats your stable sample and let go off USD Value based ‘stablecoins’. Laughable to call any FIAT stable. It’s old thinking, Backflip2Hospital.

I guess you really do not understand things so well.

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Or, I'm making a satirical maxi joke. It's unclear :)

Whenever I read their plans it is always the ones who generally try to operate within the law that get royally screwed.
I try to avoid US politics whenever possible.
Are both parties vigourously anti crypto?

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Are both parties vigourously anti crypto?

There are pockets within each where there is support.

However, do not be fooled, both parties (and the politicians in them) are about power. That is all that matters.

So to them, if there is a threat to their power, they are going after it.

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those are just the advantages of #Hive they have a strong second layer with many projects which are being developed in addition to the fact that each one owns their own resources

Plenty of potheads had to go to prison to free the weed, let's hope the coders man up.

The real shame is that we accept that these people get to control those people through violent means because reasons.
Rule by force is a disease.
Freedom is its cure.

That is true. The difference is with coders, they can be anywhere in the world and create software that is used elsewhere.

Pot tends to be a local issue since we are dealing with something physical.

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Keep in mind that this is just a US-specific issue.

So the US regulator bans stablecoins from US-regulated exchanges?

(Unless you live in the US), who gives a shit?

Other countries will see this as an opportunity to double down and garner a competitive advantage.

It's not like the US regulator can shut the networks themselves down.

So all they're doing is locking themselves out of this innovative tech that is changing the face of global finance, while the rest of us progress in reality.

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That is true although many follow what the US does. We can expect the EU to take a similar stance at some point.

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And they'll give a competitive advantage to those in Asia.

They are used to being able to control the system.

But with open, decentralised networks, they can't.

The quicker they realise this, choosing to embrace and educated instead of regulate, the better it will be for their citizens.

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Well, it's not like HBD will really get hit by this too hard but it will affect the expansion of HBD as an alternative that people will use. It looks like exchanges might be a problem in the future.

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I agree with @forexbrokr in that this is still very much a US issue, with the EU possibly following. Luckily there are still some entrepreneurial countries out there that will see this as an opportunity to profit from.
Just like the old days of Hong Kong, Panama and Singapore and Switzerland taking advantage of offshore banking deposits (think Eurodollars, Euroyen, Europounds etc).

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Can and will be seen as an opportunity by some!

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Politicians here in the US have a long history of tinkering with things they know nothing about. I worry about their plans for HBD even if it doesn’t involve HIVE itself because it would scare off exchanges.

For instance. When I first made the move to get into crypto by purchasing from an exchange my choices were limited. Due to the regulatory environment here in New York State, only Coinbase was available to me because no others wanted to pursue the licensing requirements at that time. I just fear it may make it harder for me to transact HIVE or HBD either way. Right now I use my bank to buy LTC or ETH through Coinbase to convert HIVE through Blocktrades. If an exchange must follow new rules they might get nervous about dealing with our coins.

What we need is a decentralized system to facilitate moving HIVE to US Dollars or vice versa. Unfortunately, due to the regulations over the banks, this is nearly impossible at this point.

I do believe the government’s move is solely based on their fear that crypto is something hard for them to control. Maybe they should just default to a laissez-faire/caveat emptor frame of mind.

If they ban USD-pegged algo stablecoins, we can easily repeg HBD to an index of commodities. It doesn't require a hardfork, and it would easily sidestep the regulatory intervention.

I made a post on how to do it.

This war is gonna last for quite some time...

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But that network would now also include regulators at the state level, providing state-approved stablecoin issuers a 180-day fast track to a federal green light.

Sounds like living in a shit hole like China, I hope that never happens, and I doubt it will.anything Kanet Yellen or that deranged pocahontas looser say usually don't take hold in many other politicians minds.

They are unhinged lunatics and most of us see that.

It's sickening to watch a protectionist state try to work with technology they don't understand. These clowns who we call leaders, are so stupid they can't even rationalize an open ledger running on a blockchain, everyone point and laugh.

Also don't vote for any of these fucktards ever again.

lack of investor protections" due to not being "backed fully by reserve assets" - and what about the dollar??? Bah! These people make me sick. It is just as you say, they have no clue what they're talking about, they're just threaten by the imminent change and the (every time more ) real possibility for people to opt-out of their cannibals' flesh-eating system, that's what truly gives not guarantees at all, not even life. I am from Venezuela, and the establishment over there disappears people at will. Not important how many. Now the same State-model is trying to impose in the USA.

We The People decide. Crypto means a change, a chance for freedom.

- EvM

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IM jsut going to use it on no cexs and open a online trading floor where ppl can meet and call it get crypto any time anywhere no matter the law bc no one has a right to say i cant buy something i waive my protection from the SEC i dont need them to protect me but a good play on this may be wonderfi stock its a little know one that kevin or leary runs that bough bitpay and other things only regulated legal noncustodial exchange in CA.