CLO Calls for Stablecoin Legislation Ahead of Crypto Illegal Finance Hearing
The Senate Banking hearing on illicit finance, terrorism, and sanctions evasion is scheduled for Tuesday, April 9 at 10 a.m. ET. Ahead of the hearing, Coinbase‘s Chief Legal Officer (CLO) Paul Grewal made an impassioned call for stablecoin regulation. Expressing a sense of urgency, CLO emphasizes the critical need to take immediate action.
Coinbase CLO Pushes for Stablecoin Regulation
In a post on X, Grewal wrote: “Pass stablecoin legislation now.” He noted that U.S. Treasury Department Deputy Secretary Wally Adeyemo testified about the banking case in the Senate. After reading the statement, Coinbase CLO concluded: “One thing is clear: if we are serious about appealing to a small percentage. [illicit financing] “Pass digital asset-based stablecoin legislation now.”
He added: “U.S. security interests are served by centralizing dollar-denominated stablecoins in the house of the dollar.” Additionally, Coinbase CLO pointed out some important problems that law could solve without politics. “Reserve management rules, redemption rights and politics are not hard to overcome if we are willing to do more,” he noted.
This impassioned call comes at a time when concerns are growing about the misuse of cryptocurrencies by terrorist groups and other malicious actors. In written testimony prepared for the hearing, Adeyemo shed light on the evolving tactics such groups use to exploit digital assets for illegal purposes.
Adeyemo detailed several examples involving terrorist organizations, including Al Qaeda and the Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF). He stated that they use cryptocurrencies to facilitate illegal financing. Additionally, his testimony covered the transfer of cryptocurrency from Bitcoin money laundering networks to Hamas in Gaza and the Palestinian Islamic Jihad (PIJ).
Additionally, the statement painted a clear picture of the challenges faced in combating these threats. The Deputy Minister also underlined the need for comprehensive reforms to strengthen counter-terrorism financing authorities. It highlights the need to modernize regulations to address the unique dynamics of the digital asset ecosystem.
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What are the Recommended Reforms?
Proposed reforms include the introduction of secondary sanctions targeting foreign digital asset providers that facilitate illicit financing. Additionally, Adeyemo called for the regulatory scope to be expanded to include virtual asset service providers (VASPs) and cryptocurrency exchanges. In addition, he called for clarification of jurisdiction over offshore cryptocurrency platforms.
Adeyemo’s statement emphasized the critical role of stablecoins, especially dollar-denominated ones. He highlighted broader efforts to protect national security and combat illicit financing. This aligns with Coinbase CLO’s conclusion as they both call for better regulation of stablecoins.
He also emphasized the importance of centralizing dollar-denominated stablecoins in the United States. Additionally, he stated that reserve management rules and redemption rights are also important areas to pay attention to, and this is a point that Coinbase CLO also supports.
Coinbase’s advocacy for stablecoin regulation reflects concerns expressed by Adeyemo about the risks virtual assets pose to the integrity of the financial system. CLO’s statement reinforces the need for urgent legislative action to equip regulatory authorities with the necessary tools to effectively address emerging threats .
The Senate Banking hearing, scheduled for April 9, 2024, in the Dirksen Senate Office Building, is attracting great interest. It will also provide a platform for stakeholders to engage in discussions on pressing issues related to combating illicit financing.
Also Read: US Treasury Wants Stronger Crypto Controls for National Security
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