New York Attorney General Letitia James has asked Congress to improve two proposed laws about stablecoins to protect the investors. She has stated that the existing draft of the bills fails to safeguard investors.
James is worried that these bills will allow anonymous transactions, which could let criminals commit fraud or harm the national security of the US. She wants stablecoin companies to be regulated like banks because they work similarly and could cause big problems if not controlled.
Both the bills focus on regulating stablecoins; the Senate had already passed the GENIUS Act last month with bipartisan support, while a House committee moved the STABLE Act to a full floor vote in April.
In the letter she also suggests that stablecoin deposits should be insured by the Federal Deposit Insurance Corporation, like bank accounts, and that all transactions should use digital IDs to prevent anonymous misuse. Additionally, she is also worried and thinks that stablecoins might hurt small, local banks that are already struggling.
James has also criticized another proposed law called the Digital Asset Market Clarity (CLARITY) Act. She said this law lets bad people hide their identities in cryptocurrency transactions, which could lead to fraud. She believes it weakens old laws meant to protect investors and wants stronger rules to stop scams.
James has often spoken out against cryptocurrencies. In April, she asked Congress to stop retirement savings from being invested in crypto or related funds, saying they have “no real value.” She has also taken legal action against several crypto companies during her time as Attorney General.
On the other hand, supporters of the stablecoin laws, such as Senators Kirsten Gillibrand and Bill Hagerty, have stated that these laws will protect people and allow new ideas in the crypto world by maintaining the US dollar’s global strength. James agrees that new ideas are important, but she insists that laws must protect the public and the banking system first.
Also Read: SEC Approves Grayscale ETF with BTC, ETH, XRP, SOL, ADA
