Although the STABLE Act, proposed Dec. 2 by U.S. Reps. Rashida Tlaib (D-Mich.), Jesús “Chuy” García (D-Ill.) and Stephen Lynch (D-Mass.), is being portrayed by its supporters as protecting low-income communities, many women from marginalized communities fear it would actually make their situation much worse.
Several Black women in the tech industry, including Maker Foundation board member Tonya Evans, tweeted a plea to reconsider this bill. Olayinka Odeniran, chairwoman of the Black Women Blockchain Council, told CoinDesk her group of seven board members joined dozens of other professionals in signing a letter to the incoming Biden presidential administration asking for minority industry leaders to help draft such blockchain regulations.
“I come from the financial industry, so I know when any policy is in the early stages of being created they ask for the community’s input. The potential policy they are creating doesn’t have community input,” Odeniran said in an interview. “This will limit the amount of stablecoins out there that people from my community can use to on-board into the space. And it will limit the companies that are interested in using them to serve underprivileged or underbanked minorities.”
Stepping back, the STABLE Act would require stablecoin issuers to secure bank charters and regulatory approval before circulating stablecoins, the tokenized cash either backed by or representing the value of one dollar. In short, projects like the Maker Foundation would need to get an American banking license in order to shepherd ecosystem development of the Ethereum-based MakerDAO, a protocol built to issue a stablecoin called dai.
People making more than $200,000 annually, under the STABLE Act, would still generally retain access to a broader spectrum of crypto assets. Licensed entities that prioritize such customers could still issue stablecoins. Coinbase, for example, issued the stablecoin USDC by way of the Centre consortium with Circle Financial – a team that could probably afford to apply for a banking license.
Odeniran said that, despite legislation like the Equal Credit Opportunity Act, historically banking institutions offer different rates or requirements from people of color. As such, raising the compliance cost of participating in blockchain networks would inevitably mean, she argued, that fewer institutions will serve populations with slimmer profit margins.
Silicon Valley unicorns are already taking the approach of “empowering” Venezuelan families by using cryptocurrency. This hasn’t appeared to ruffle regulatory feathers in California. The STABLE Act may soon undermine the choice Americans have to empower themselves with cryptocurrency, rather than simply exporting this tool for “freedom” to the developing world.
Washington, D.C.-based nonprofit Coin Center issued a statement warning the STABLE Act is so broad it could also make crypto node operators in the United States vulnerable to arrest.
That’s why pseudonymous Cosmos developer Chjango Unchained told CoinDesk in a direct message this bill could outlaw the use cases that help unbanked or underserved fintech users. As a woman of color from a low-income, immigrant household, now a junior professional in Silicon Valley, she tinkers with nodes and uses stablecoins to trade with the same type of systems that wealthier tech investors also use.
“I think the [bill’s] verbiage is paying lip service to those communities, but in reality the second-order consequences of it will play out to disenfranchise exactly those communities they seek to ‘protect,’” Chjango said in a text interview. “Stablecoins now enable users to never have to exit back into fiat, where all of those old guardrails protecting the incumbents are firmly in place. And the kinds of users who benefit from having access to such liquidity are exactly people of color.”
This is especially true if prospective wallet regulations simultaneously hinder those who hold their own crypto, rather than entrusting it to an exchange. On Wednesday, U.S. Reps. Warren Davidson (R-Ohio), Tom Emmer (R-Minn.), Ted Budd (R-N.C.) and Scott Perry (R-Pa.) sent a letter “expressing our concern” about rumors that Treasury Secretary Steven Mnuchin intends to unveil self-hosted wallet regulations in the coming weeks.
If American lawmakers disagree and enact legislation that could apply to node operators or wallet users, then a wide range of cryptocurrency users suddenly become legal targets.
Crypto "is a means to financial freedom for so many who would otherwise have to submit themselves to a lifetime of indentured servitude to their student loans, all without requiring a credit check,” Chjango said.
It remains to be seen how this bill would impact the variety of crypto users beyond blockchain network operators – from hobbyist node operators to international activists. The bill’s advisory scholar, Willamette University law professor Rohan Grey, tweeted: “You have to accept that running an open blockchain network means you are, at some level, liable for the actions that take place on that network.”
Palestinian-American entrepreneur Mona El Isa, the Goldman Sachs trader turned CEO of Melonport AG, told CoinDesk in a direct message she is worried this bill could “raise barriers'' for “low- and moderate-income” households that “will now be shunned from the same system that currently doesn’t bank them anyway.”
Plus, El Isa said Palestinian tech enternpreuers and freelancers with limited banking services sometimes accept cryptocurrency payments from clients abroad because it’s one of the only ways for them to “earn an honest living.”
“The claim that this [STABLE Act] is something to be proud of because it somehow protects minorities and low-income people from being bullied is nothing short of bulls**t,” El Isa said.
Likewise, an American stablecoin user named Inna Dominus described Grey’s tweets about blockchain technology as “toxic.” As an executive in the legal industry who uses stablecoins as an educational tool with her family, Dominus told her daughter this bill is a prime example of why women of color need to keep fighting against prospective laws that would further marginalize minorities with fewer financial options.
Dominus said she believes the way ambiguous bills are carried out by government agencies may systematically put marginalized groups at an even further disadvantage.
“It seems silly that we’re still fighting the perception that crypto is more predatory than, say, large institutional banks,” she said in a text interview. “The difference between crypto and the banks is that banks have much better lobbying. … We need better representation on Capitol Hill or we will continue to see these promulgations, these kinds of misinformed bills.”
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