Blog Article

How We See the STABLE Act


Denelle Dixon

Publishing date

Issuer-enforced finality

Stellar Conensus Protocol


The power of blockchain technology rests in how it empowers individuals with access to financial services. Unlike any time in history, consumers can have unprecedented ownership of the value in their possession in a way that is fast, accessible, and secure. This innovation has far-reaching potential for those historically marginalized by traditional banking, both in the United States and around the world.

But, that potential will be stymied if our leaders try to fit this technology and its regulatory framework into old boxes. And that’s exactly what the STABLE Act would do — apply outdated traditional frameworks that haven’t been updated in decades to new payment infrastructure and innovations. This type of legislation puts the power back into the hands of banks, instead of people.

We, at SDF, are supportive of the Representatives’ stated objective of protecting consumers. We hold that as a shared belief and take that responsibility to heart as we develop and shepherd this technology with our community.

But we believe the STABLE Act would actually do the opposite of this stated intent; instead of protecting consumers, it could harm them in a number of important ways. First, it would effectively grant a monopoly over a promising new payments technology to big banks, giving banks more power and entrenching their already highly concentrated market power. Less competition means fewer options for consumers.

To make matters worse, US banks have shown little interest in stablecoins and there is no indication that if today’s stablecoin issuers were banned, that banks would take up the role. Rather, as a growing source of competition is wiped out at the stroke of the legislators’ pen, banks would have renewed freedom to raise prices and reduce customer service.

We believe that this type of legislation needs to be drafted in partnership with the public and private sectors. We need to work together to create the right regulatory frameworks that put this innovation into the appropriate, tailored package — not falling back on the legacy system. New solutions require new thinking.

We hope that in the coming months we can work with the authors of the STABLE Act to come up with solutions that protect and empower consumers while also fostering innovation and helping the entrepreneurs and innovators in the blockchain industry to realize its potential.