By
Godfrey Benjamin
April 29th, 2024
Despite delays from the SEC, US lawmakers have introduced two proposed bills aimed at regulating stablecoin issuers and the entire crypto market.
Paul Grewal, Coinbase’s chief legal officer (CLO), has called on the United States Congress to pass stablecoin regulations ahead of the Senate Banking, Housing, and Urban Affairs Committee hearing on illicit finance scheduled for April 9.
In a social media post on X, the Coinbase executive, while responding to US Treasury Deputy Secretary Adewale’s written testimony for the hearing, said that if Congress hopes to tackle illicit financing associated with digital assets, stablecoins regulations must be passed without delay.
Willingness to Act Beyond Political Considerations
He further noted that issues like reserve management rules and redemption rights should not be difficult to resolve if there is a genuine willingness to act beyond political considerations.
Treasury DepSec @wallyadeyemo has posted his written testimony for tomorrow’s @SenateBanking hearing on illicit finance. One thing is clear: if we are serious about addressing the small percentage of IF conducted with digital assets, pass stablecoin legislation now. 1/3
— paulgrewal.eth (@iampaulgrewal) April 9, 2024
In the written testimony that Grewal responded to, Adeyemo pointed out that terrorist groups have been exploiting the decentralized nature of cryptocurrencies for money laundering.
He cited an incident from five years ago when al-Qaeda and associated terrorist groups, primarily based in Syria, ran a Bitcoin (BTC) money laundering network. According to the testimony, the bad actors used social media platforms to seek donations of digital assets to fund their operations.
Adeyemo also disclosed that one of the challenges facing the agency is that the terrorists are becoming increasingly adept at concealing their identities and transferring resources using digital assets.
He also noted that despite the agency’s success in making it more difficult for terrorist groups to move money through traditional financial systems, the malicious actors have found solace in virtual assets.
However, to combat the exploitation of cryptocurrencies by malicious actors, Grewal suggested that introducing stablecoin laws would be instrumental in making the crypto economy more secure.
Proposed Solutions and Coinbase’s Advocacy Efforts
Coinbase has been actively advocating for the regulation of the crypto market in the United States. Last year, the exchange urged the US Securities and Exchange Commission (SEC) to introduce a single rulebook to regulate the issuance and usage of cryptocurrencies in the region.
Despite delays from the SEC, US lawmakers have introduced two proposed bills aimed at regulating stablecoin issuers and the entire crypto market. However, these bills have not made significant progress since their introduction last year.
Meanwhile, for Tuesday’s hearing, Adeyemo has proposed various reforms to address the challenges of illicit finance. One of the proposed reforms includes the introduction of secondary sanctions targeting foreign digital asset providers facilitating illicit finance.
Adeyemo also called for expanding regulatory coverage to include virtual asset service providers (VASPs) and crypto exchanges. He urged clarification of jurisdictional reach to address offshore digital asset platforms.