The Federal Reserve Board’s most recent semi-annual Financial Stability Report, issued November 15, 2019, includes a lengthy discussion of potential systemic risks posed by stablecoins. In the report, the Fed observed that innovations fostering faster, cheaper and more inclusive payments could complement existing payment systems and improve consumer welfare if appropriately designed and regulated. But the Fed also warned that the emergence of global stablecoin payment networks introduces important challenges and risks related to financial stability, monetary policy, money laundering and terrorist financing, and consumer and investor protection.
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The 116th Congress is off to a busy start, and various members in both the House and Senate have introduced a wide range of bills impacting blockchain technology and digital currencies. Some of the bills would provide greater regulatory certainty to operators of blockchain businesses, while others focus on preventing the use of digital currency to facilitate unlawful behavior. A few of the bills were introduced in the last congress but did not pass. Though passage of any bill is never assured, we have summarized a number of the most recent bills of interest to blockchain developers and the crypto community.
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A vigorous competition among the states to regulate digital assets has begun to develop. Some states, such as New York, have adopted regulations that take a very proscriptive approach to regulation in the interest of consumer protection. States like Wyoming, on the other hand, see an opportunity to stimulate the local economy and take a far more permissive view of digital assets.
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On August 6, 2018, the FTC published a notice seeking public comment as to whether broad-based changes in the economy, evolving business practices, new technologies or international developments might require adjustments to competition and consumer protection law, enforcement priorities and policy. The topics that the FTC seeks comments on could easily accommodate market developments due to the emergence of blockchain technology and related applications.
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