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25 January 2021

Crypto’s New Villain: Meet the Legal Scholar Behind the STABLE Act - Decrypt

Crypto’s New Villain: Meet the Legal Scholar Behind the STABLE Act - Decrypt

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“By targeting stablecoins this bill would have the effect of also destroying the larger Ethereum network and any other smart-contract-enabled public blockchain as necessary collateral damage,” he said.

“We think that it’s more important to preserve anonymous decentralized privacy when it comes to public money than forms of private money,” he said.

“The idea that we don’t care about privacy is bullshit...I care so much that I think the only fight worth having is over public money, and that all this stuff about DeFi is just a mistake of attention and focus.”.

The more money involved, the more that risk gets transferred from individual consumers and grafted onto the larger financial system.

“That's the hard lesson of banking history, which is that all kinds of actors have come up with business models or reasons why they believe their particular approach to asset collateralization and risk or whatever is unique or different and therefore doesn't pose a systemic risk the way that others do and, historically, each of those has not been the case,” Grey said.

Mobile money is different from money market mutual funds.’ The time-and-again pattern is that actors who don't understand their own history and don't understand the systemic implications of what they're doing downplay the risks of what they're doing until there is a moment of crisis and at that moment they come with a handout asking to have public support in the name of the interest of the consumer.” .

“The way you address this,” Grey said, “is to have government support and to recognize that acquisition deposits that function as money are an extension of the public monetary system and need to be regulated as such.”.

That's different from saying that once you create a law like this, the next step is people getting thrown out of their beds,” he said

Regardless, in a way, this bill would give cryptocurrency advocates a clearer sense of where they stand—something industry players have been asking for

“The idea here is that even an instrument issued on a decentralized network,” said Grey, “if that instrument is trying to walk and talk like money, and therefore carries a systemic risk, it should be regulated like money.”

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