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The Digital Chamber of Commerce, one of the most prominent lobby groups in the cryptocurrency space, has asked the US Congress to preserve the revenue-generating capabilities of the Steeplecoin payment coins.
The group asserted in its latest proposal that current projects under the CLARITY Act threaten to block the core mechanisms of decentralized finance.
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The Digital Chamber urges Congress to preserve stablecoin returns
The group specifically appealed Legislators To maintain the exemptions in Section 404 of Act CLARITY proposal.
These provisions distinguish between traditional “interest”, which banks pay on insured deposits, and other types of interest. These provisions effectively separate this income from the “rewards” generated by liquidity provision (LP) activities via decentralized exchanges.
The chamber warned that removing these exemptions would not only hinder domestic innovation, but also “undermine control of the dollar.”
The group sees that if it is blocked Stablecoins regulated in the United States Legally unable to participate in DeFi markets, global capital will inevitably move towards foreign digital assets or unregulated entities abroad.
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I believe this change will reduce the demand for… The US dollar in the digital economy.
The lobby group also claimed that a complete ban on returns would push users to adopt negative retention strategies.
The group explained that this, ironically, would increase financial exposure to “non-permanent loss”, a risk associated with the volatility of assets in liquidity pools.
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The Digital Camera makes regulatory concessions
The banking lobby points out that allowing stipplecoins to offer returns without meeting bank capital requirements creates a dangerous arbitrage opportunity.
The banking community claims that this regulatory loophole threatens the stability of the entire financial system, and they also claim that High yielding stablecoins drain liquidity from community banks.
As a proposed compromise, the chamber proposed requiring clear disclosure to consumers to make it clear that stipplecoin returns are not comparable to bank interest rates and are not FDIC insured.
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The group also recommended that regulators conduct a federal study of the impact of “deposits” two years after the law takes effect.
The group claims that these experimental data will prove that stipplecoins complement the traditional banking sector, not hinder it.
The recommendations come as negotiations on the Integral Market Structure Bill are underway (law of clarity) Towards a dead awkwardness.
A high-stakes meeting at the White House earlier this week between bank representatives and cryptocurrency executives ended in failure.
Wall Street lobbyists continue to strongly oppose any measure that allows non-bank stablecoin issuers to pass on profit to customers, as they see such products as a direct threat to the traditional model of deposits.
