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SEC Commissioner Expects Tighter Stablecoin Regulation — Yellen Says Stablecoins Not Real Threat To Financial Stability

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SEC Commissioner Expects Tighter Stablecoin Regulation — Yellen Says Stablecoins Not Real Threat To Financial Stability

A commissioner with the U.S. Securities and Exchange Commission (SEC) expects to see stricter regulation on stablecoins. However, Treasury Secretary Janet Yellen says stablecoins are currently “not a real threat” to the country’s financial stability.

SEC Commissioner on Stablecoin Regulation

The regulation of stablecoins has been a hot topic this week following the Terra fiasco which saw UST losing its U.S. dollar peg and LUNA plunging to near zero.

A commissioner with the U.S. Securities and Exchange Commission (SEC), Hester Peirce, talked about cryptocurrency regulation Thursday during an event hosted by the London-based Official Monetary and Financial Institutions Forum policy think tank.

Peirce, who is known in the crypto community as “crypto mom,” indicated that tighter regulations on cryptocurrency, particularly stablecoins, could be coming soon. She was quoted as saying:

One place we might see some movement is around stablecoins … That’s an area that has obviously this week gotten a lot of attention.

Lawmakers to Work With Treasury Department on Stablecoin Regulation

U.S. lawmakers have emphasized the urgent need for stablecoin regulation. In her testimony before the Senate Committee on Banking, Housing, and Urban Affairs this week, Treasury Secretary Janet Yellen stressed that it is important and urgent for Congress to pass legislation governing payment stablecoins.

Yellen also testified before the House Financial Services Committee this week, stating that for stablecoins:

I wouldn’t characterize it at this scale as a real threat to financial stability, but they’re growing very rapidly and they present the same kind of risks that we have known for centuries in connection with bank runs.

Both the Financial Stability Oversight Council (FSOC) and the Federal Reserve Board have warned about the risks of stablecoin runs that threaten the country’s financial stability.

Do you think stablecoins should be regulated urgently? Let us know in the comments section below.

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Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

abolish Fed

The Eerie Similarities Of Today’s Great Monetary Shift And The Panic-Led Creation Of The Federal Reserve System

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The Eerie Similarities Of Today’s Great Monetary Shift And The Panic-Led Creation Of The Federal Reserve System

While many Americans believe the U.S. Federal Reserve is the caretaker of the country’s monetary system, its also believed to be one of the worst financial institutions ever created. In 2022, amid a gloomy economy, war, and a number of global crises, the possibility of a great monetary shift has increased. The preceding years filled with panic, are very similar to the years that led to the creation of the Federal Reserve System.

The Panics That Led to the Last Transition of Wealth May Help Us Understand Today’s Monetary Transformation

During the last few years, just before the onset of Covid-19, discussions about a “Green New Deal,” a “Great Reset,” and a “New Bretton Woods Moment” have increased a great deal. These topics have made people believe a great transition of wealth is taking place, and the consortium of modern central banking is bolstering the change. Many people wonder how these changes happen so fast, and why the public simply allows such transformative changes without question. The best way to understand such changes is to look at the great transition of wealth that took place in the late-1800s into the mid-1900s.

The first historical moment that took place back then was the creation of the Federal Reserve System. It is well documented that the Fed was born on December 23, 1913, after president Woodrow Wilson signed the Federal Reserve Act, but the central bank’s inception started years before Wilson’s Act. What most people don’t know is that J.P. Morgan and the “Money Trust” or the “House of Morgan” helped fuel the creation of an American central bank. None of the evidence is hidden from the public as the Pujo Committee, a congressional subcommittee that operated from 1912–1913 investigated the group in great detail.

In the late 1800s, Americans grew untrustful of banks as a financial cartel had formed that used American deposits for bucket shops and proposition bets. Financial manipulation was growing wildly and in 1896, Morgan created the Morgan-Guarantee Company. Over the next decade up until the summer of 1907, the U.S. economy was extremely volatile. While the ‘Panic of 1907’ or the ‘Knickerbocker Panic’ is well known in history. There were earlier panics and bank runs in America in 1873 and 1893. Morgan and his friends reportedly monopolized a great deal of businesses, and more specifically Morgan controlled close to half of the country’s railroads.

Tim Sablik and Gary Richardson from the Fed’s Bank of Richmond branch explain that the “Panic of 1873 arose from investments in railroads.” That summer in 1907, the U.S. economic system broke and a large swathe of financial institutions and corporations went bankrupt. The biggest failures stemmed from Westinghouse Electric Company and Knickerbocker Trust in New York City. Richardson and Sablik noted that the Panic of 1884 derived from two major New York City financial firms failing. Both of the bank’s owners made “speculative investments” and Marine National Bank and Grant and Ward went bust.

Cointalk.com explains that one cash alternative was a clearing house check issued through the Milwaukee Clearing House.

The U.S. Treasury tried to save the day in 1907 by funneling millions of dollars into failing financial institutions. While liquidity was horrid for American banking customers and depositors, a number of businesses and banks created cash substitutes. After the Treasury attempt and cash substitutes did not work, J.P. Morgan stepped in to fix the situation. Morgan and America’s leading finance men channeled lots of money into weak banks with help from the government and the country’s business leaders.

3 Financial Crises, Jekyll Island, and the Aldrich Plan — Are Panics and Crises Preceding Today’s Monetary Shift?

The three financial crises (1873, 1893, 1907) led a majority of Americans to believe the United States banking system was officially corrupt. After the Panic of 1907, bureaucrats in collusion with a number of U.S. business leaders, convinced the public the banking system needed reform. After all, the public was fed up with banks spending their deposits on speculative investments and bucket shops, and they were growing tired of bank runs. U.S. politicians then moved toward strict regulatory reform and Congress introduced stop-gap legislation and the National Monetary Commission.

The Aldrich-Vreeland Act (1908) allowed U.S. bankers to start national currency associations, in the event a national emergency of liquidity arose. The initiation of the Federal Reserve was sparked by the liquidity crises mentioned above, and through the Aldrich-Vreeland Act, banknotes were backed by the institution’s securities and government bonds. Government library documents further show the Panic of 1907 “made people want a powerful central bank that could ‘protect’ the common man from the ‘abuses of the Wall Street bankers.’”

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Similar to the recent economic calamities America is facing today, with Covid-19 lockdowns and the disruptions from the war in Europe, the previous financial crises in 1873, 1893, and 1907 invoked one of the largest monetary shifts in history. While most Americans are taught in high school that the Fed’s system manages the money and credit throughout the country, G. Edward Griffin’s 600-page book “The Creature from Jekyll Island” paints a different story. It explains how the “House of Morgan” and a favorable U.S. president colluded to create the U.S. central bank.

A descendent of the Rockefellers, Nelson Aldrich was also instrumental in the secret meeting at the Jekyll Island Hunt Club in Georgia. The Federal Reserve System was crafted by Morgan’s ‘Money Trust,’ select politicians, and Nelson’s foundational design called the “Aldrich Plan.” In recent times, descendants of the Rockefellers from the Rockefeller Foundation have been accused of designing plans called “lock step” in 2010, which is eerily similar to the Covid-19 lockdowns that happened ten years later. The New York-based philanthropy report discusses how governments could control an influenza-like pandemic through lockdown measures.

While Wilson’s December 23, 1913 signing is well documented, most Americans don’t know about the secret meeting held on Jekyll Island in 1910. History teachers and school books do not discuss the years before the Fed was created. But those who do know about how the Fed started and hold the belief that it continues to manipulate the free market, want the central bank abolished. “The Fed has become an accomplice in the support of totalitarian regimes throughout the world,” Griffin writes in his Jekyll Island book published in 1994.

The previous years that led to the consortium of modern central banking and the Fed are very similar to today’s economic crises, and it’s safe to say panic fuels changes. If a great transition of wealth is taking place today, the signs show a transformative outcome, planned years ago, may very well be on the horizon. It’s uncertain what the monetary shift will look like, but looking back at history and things like the creation of the Federal Reserve system, clearly shows that certain people are likely to benefit more than others.

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abolish Fed, Aldrich-Vreeland Act, banks, Bucket Shops, Congress, End the Fed, Fed, Fed Abolish, Federal Reserve, Federal Reserve History, G. Edward Griffin, Gary Richardson, House of Morgan, J.P. Morgan, Jekyll Island, Morgan, Nelson Aldrich, Panic of 1873, Panic of 1893, Panic of 1907, Rockefellers, speculative investments, the fed, Tim Sablik

What do you think about today’s transition of wealth and comparing it to the panics and crises that happened over 100 years ago during the last great monetary transition? Let us know what you think about this subject in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at Bitcoin.com News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 5,000 articles for Bitcoin.com News about the disruptive protocols emerging today.

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Behind the bipartisan crypto bill that’s coming to Congress

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Behind the bipartisan crypto bill that’s coming to Congress

Cover art/illustration via CryptoSlate

Republican Senator Cynthia Lummis is delivering on her promise to get a cryptocurrency bill to Congress this year.

The staunch Bitcoin supporter representing the state of Wyoming won’t be alone in her effort to get fellow congressmen to pass the law—she will work hand in hand with Democratic Senator Kirsten Gillibrand.

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8 US Lawmakers Urge SEC To Stop Crippling Crypto, Stifling Innovation

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8 US Lawmakers Urge SEC To Stop Crippling Crypto, Stifling Innovation

Eight U.S. lawmakers have sent a letter to the chairman of the U.S. Securities and Exchange Commission (SEC) regarding how the agency collects information from crypto companies. According to the crypto community, the SEC’s “requests” for information “are overburdensome, don’t feel particularly voluntary, and are stifling innovation.”

US Lawmakers Want Answers From SEC

U.S. Representatives Tom Emmer, Darren Soto, Warren Davidson, Jake Auchincloss, Byron Donalds, Josh Gottheimer, Ted Budd, and Ritchie Torres have jointly sent a bipartisan letter to the chairman of the U.S. Securities and Exchange Commission (SEC), Gary Gensler, regarding how the SEC obtains information from cryptocurrency and blockchain companies.

Congressman Emmer explained in a tweet the reason behind the letter:

My office has received numerous tips from crypto and blockchain firms that SEC Chair Gary Gensler’s information reporting ‘requests’ to the crypto community are overburdensome, don’t feel particularly …voluntary … and are stifling innovation.

Rep. Warren Davidson tweeted: “We must promote American innovation rather than stifle it with an incoherent mix of bad regulation, selective enforcement, and ongoing inaction.” He added:

I joined Rep. Tom Emmer and colleagues sending a letter to SEC Chair Gary Gensler regarding the SEC crippling crypto in America.

In their letter to Gensler, the lawmakers pointed out: “It appears there has been a recent trend towards employing the Enforcement Division’s investigative functions to gather information from unregulated cryptocurrency and blockchain industry participants in a manner inconsistent with the Commission’s standards for initiating investigations.”

The lawmakers stressed:

We have reason to believe that these requests might be at odds with the Paperwork Reduction Act (PRA).

The letter explains that pursuant to this act, “in seeking information from the American public, federal agencies must be good stewards of the public’s time, and not overwhelm them with unnecessary or duplicative requests for information.”

Congressman Emmer emphasized:

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Crypto startups must not be weighed down by extra-jurisdictional and burdensome reporting requirements. We will ensure our regulators do not kill American innovation and opportunities.

The letter requests that the SEC answers 13 questions no later than April 29. The full list of questions can be found here.

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Congress, crippling crypto, darren soto, division of enforcement, enforcement actions, Gary Gensler, letter to SEC, SEC, stifle innovation, tom emmer, Warren Davidson

Do you think the SEC is stifling innovation in the crypto sector? Let us know in the comments section below.

Kevin Helms

A student of Austrian Economics, Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests lie in Bitcoin security, open-source systems, network effects and the intersection between economics and cryptography.

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Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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