Original compilation: 0x214, BlockBeats
Original compilation: 0x214, BlockBeats
On September 20, according to Bloomberg News, the U.S. House of Representatives is drafting legislation to regulate Stablecoin, which will implement a two-year ban on Stablecoin, an algorithm similar to UST. According to a copy of the latest version of the draft, it is illegal to issue or create a new "Endogenously Collateralized Stablecoin" (Endogenously Collateralized Stablecoin). A House committee could vote on the draft legislation as early as next week. In this regard, Curve published an article in-depth analysis of the new term "Endogenous Mortgage Stablecoin", and BlockBeats compiled and translated it as follows:
As soon as the news came out on September 20, Twitter was flooded with bad news. oneseriesAbout AmericaDraft Stablecoin ActReports have been widely circulated that the bill could crush Stablecoins for good.
Market panic spread rapidly, and FXS plummeted by 10%.
SummarizeSummarize：
- The bill would limit the approval of US stablecoin issuers;
- The Act is still in its early stages and changes are still possible;
- Centralized Stablecoins are largely unaffected;
- FRAX will be slightly adjusted to comply;
- Overcollateralized Stablecoins are not affected;
- The bill kills Stablecoin innovation, but there is still room for it.
It will be some time before sluggish lawmakers actually act on the bill, which is still in the draft stage, meaning it hasn't even been registered with Congress. This puts it well behind several other stablecoin-threatening bills that have yet to actually materialize.
HR 7328: The Stablecoin Transparency Act, Trey Hollingsworth, March 31
S 3970: The Stablecoin Transparency Act, Bill Hagerty, May 10
HR 4741: Market Structure for Digital Assets ... Donald S. Beyer Jr., August 13
S 4356: Responsible Financial Innovation Act, Lummis/Gillibrand, September 15
For any draft item to actually become law, it usually takes a long and cumbersome process until it is filled with hundreds of pages of irrelevant material by swing state politicians.
There are only 9 weeks left in the legislative schedule. It is unlikely that the US Congress will take the time to integrate these fragmented drafts into a bill that will shake the entire financial ecology.
Having said that, when this kind of "hasty" bill discussion is put on the agenda, it is enough to arouse our vigilance and concern. According to the information that has been leaked so far, these draft documents are too sloppy, which is enough to demonstrate the urgency of the official intention to intervene.
Understand that with UST collapsing, the sense of urgency in Washington, D.C. has skyrocketed. Do Kwon not only drained all of our wallets, he also got a bunch of American crypto users thrown in jail.
When Congress achieves bipartisan consensus on the same issue, it is often ordinary people who suffer. The reason this draft should be of interest is that it is said to have been co-sponsored by Patrick McHenry, previously hailed as the “Cryptocurrency Champion.” After all, the current rumors in the market are basically rumors, and we can also listen to the opinions of this cryptocurrency champion. However, forPAC DAO Congress AuctionFor those who bid on his NFT, this may be bad news.
The bill’s mention of an “Endogenously-collateralized” Stablecoin caught everyone’s attention, a phrase that takes us back to high school biochemistry class.
TwitterTwitterseen in.
However, the word became popular a month ago at least. it seems thatJerryBritoBegan to teach everyone to use such obscure language expressions.
We speculate that Congress uses this term just to sound more powerful. It's fashionable to complain that the ignorant in Washington haven't done their homework, so they parrot it to appear smart.
An "endogenous" system is defined as one that is backed by collateral within its ecology. LUNA is endogenous to UST, while USD exists outside the USDC ecosystem, so USDC is "exogenous". About 8% of FRAX is backed by burning FXS, so FRAX is endogenous, just adjust its algorithm accordingly as needed.
If we want to explain in technical terms, we prefer to use the exergonic and internal energy (endergonic) reactions in thermodynamics, which are related to the changes in Gibbs Free Energy (Gibbs Free Energy) it may cause to a system .
Or you can simplify this concept to a chemical exothermic/endothermic reaction, referring to the change in enthalpy - the biggest reason for LUNA's collapse is because it is exothermic, and it also exploded other markets.
Congress may have several motives. The first motivation may be to clear the way for CBDC, a topic we have alreadyauthorDiscussed, follow-up articles will be published in-depth discussion.
In any case, it would be foolish to assume that a CBDC would compete directly with a Stablecoin whose use case is entirely different. Quite the contrary, a robust Stablecoin ecosystem will only enhance the utility of a CBDC.
Another motive of Congress, which may be more altruistic, is to prevent another Luna/UST-style crash. If that's the case, it might be a little harder to blame Congress' intentions. Terra's debacle was truly horrific, many people were badly damaged, and no one wants a repeat of the tragedy.
The adoption of the term "endogenous" may just be a friendly reminder to single out stablecoins like UST (mainly backed by LUNA), but it may be difficult to achieve the effect with such convoluted words. At the time of the crash, Terra was still in the process of making its stablecoin backed by exogenous collateral like Bitcoin, but the hammer of fate struck quietly before Terra could achieve its goal.
Jurisdiction-related issues also raised concerns. Although the United States has actually taken many actions, it is far from clear whether the United States really has the legal power to supervise companies in other countries. Why does the United States have such power? Arguments in the US legal system do not stand up to scrutiny, as demonstrated by SEC Chairman Gary Gensler's absurd power grab.
BlockBeats Note: According to reports, US SEC Chairman Gary Gensler has repeatedly stated publicly that he will continue to expand the power of the SEC and fully supervise the encryption market.
If the bill does pass into law, one of its main effects will be to weaken America. It is in the national interest of the United States to keep Stablecoin innovation within the United States. Preserving all of DeFi denominated in USD is a matter of national security. The U.S. reaps many benefits from USD dominance, so promoting a healthy ecosystem of USD Stablecoins is the best option for the U.S. to extend that power into the new economy. Scaring away innovators who want to build a USD stablecoin is a direct threat to American prosperity.
Stablecoins are also one of the hottest areas of innovation, combining cutting-edge technology and Product-Market Fit (PMF). Putting restrictions on stablecoin innovation will really only drive innovators to jurisdictions that don't care about American bullshit. Stablecoin experimental innovation will not stop, but its headquarters will be established in areas outside the jurisdiction of US law enforcement. Let Frax Finance founder Sam Kazemian build in the United States is the top priority!
Other than that, it's all kind of silly. Cheaters aside, no one trying to build a stablecoin wants it to fail. The real builders pay attention to Terra and learn lessons to prevent similar situations from happening. They don't need lawmakers to tell them UST is an unsound Ponzi scheme. They are busy working on a real working stablecoin formula and expanding on it.
Is it a bad thing if Congress does ban "design flawed" Stablecoins? This may be preferable to enacting a blanket ban. However, the definitions of "endogenous" and "exogenous" are very confusing, and there may be various unimaginable gray areas in the middle. We also all know that regulators are always eager to test how far they can stretch their hands, so under such laws, we can expect good projects to suffer.
In fact, if the definition of "endogenous" in the draft is strictly followed, the dollar itself can also be directly banned by Congress. After all, the U.S. dollar itself is also a stable calculation based on poor Token economics.
It's also easy to exploit legal loopholes if someone for some reason wants to create an extremely unstable UST clone. It may be illegal to start UST under the name of Terra, but using a different multisig and website can also technically be counted as an "exogenous project". Expect the entire effort of US policymakers to be easily overturned by a Lionel Hutz-level lawyer in the Simpson family.
While many are concerned about the impact on the yet-to-be-launched crvUSD, Curve reiterated that, as ever, the only victim of this legislation will be the United States itself.
Original link
IOS
Android