Former CFTC Chair on The Stable Act- “Weak Standards, Lack of Guidelines and…..

Representative Stephen Lynch and Former CFTC Head Timothy Massad bashed the STABLE Act on Monday. Their prime objections are the lack of regulatory guidelines and the inappropriate distribution of authority in trade control. 

Stephen Lynch, former head of the CFTC, says that the crypto community is not headed in the right direction. There are no accurate crypto operating regulations. The SEC has no controlling mechanism to optimize crypto trade. According to him, it could be the perfect plot for an upcoming financial disaster.  

On Trump and His Policy 

He heavily criticized Trump’s policy paradigm when speaking about crypto regulations. The pro-crypto policy by Trump has no filter. He is immensely indulgent and wants to create an unwavering ecosystem of trade. He also thinks two reckless outcomes of these unthought pro-crypto moves are $TRUMP and $MELINA.  

Besides, Trump, according to him, seems to have a limited visionary outcry when it comes to leveraging a conducive environment to support regulated crypto transactions.  

The recent trade obligations and tariffs imposed on Canada, Mexico, and China are contrary to his pro-crypto policy. A lot of traditional stocks were badly hit as an outcome of this tariff war. At the same time, its effect was etched on the crypto trade also.  

The way forward  

The cryptocurrency community and the industry are, however, optimistic about improved clarity of crypto trade under the Trump administration. 

Thankfully, there have been some head-on movements in that direction. On 11th Feb, a US House Subcommittee hearing gave a bit of clarity on how digital assets transactions would take place. 

Jonathan Jachym had the first turn, and he focused on setting some ground rules for more centralized intermediaries. He also clamored in favor of giving the CFTC spot market authority so that it could conduct regulatory activities freely.  

He commented- the CFTC can then “regulate centralized and intermediaries, and secondary market transactions, in digital commodities.” 

Is the STABLE Act enough?  

On 5th Feb, an allied body released a draft of the STABLE Act. It is a detailed policy to provide regulatory clarity on how stable coin issuers would operate. However, the former chairperson of the CFTC, Timothy Massad raised some grave concerns regarding the act. Firstly, he said that the state standards are quite weak and won’t be able to handle all stablecoin matters.  

Secondly, he hinted at an inadequate review process in the absence of any detailed federal supervision of state issuers. But the most important of the lot is that there is no guideline about what would happen when any stablecoin user goes out of money.  

There is a series of problems in this act draft, according to him. The market seems to give credit to this former CFTC chair for pointing out these issues. Rest assured; the community hopes that the following draft of this act will address these problems with immediate effect.