United Texas Bank’s CEO, Scot Beck, called on the participants of the blockchain working team of the state to suggest a policy regarding restricting stablecoins to just the banking entities instead of the crypto companies. On Friday, while speaking in Austin in front of the Texas Work Group on Blockchain Matters, Beck recommended that a limit should be placed on the issuance of the stablecoins that are backed by the USD only to the licensed banking institutions instead of the other issuers such as Circle.
Scott Beck Recommends Limiting Stablecoin Issuance to Banks
The CEO of the United Texas Bank referred to a report published by the President’s Working Group on Financial Markets in November. In that report, it was noted by the group that the issuers of stablecoins required to be held liable to the same principles as the insured depository organizations taking into account federally and state-chartered banks. As per him, if the respective stablecoins are described as money, the adequate entities are the banks to manage as well as issue the stablecoins.
Beck also stated that the banking organizations have the skills as well as the legal agenda required to handle money, as opposed to the newly emerging entities of today. In his words, banks are considered to be extremely regulated actors at both the federal and state levels.
According to Beck, taking the operations related to stablecoins into the world of banking along with putting a prohibition over the non-banking organizations in the case of the issuance of stablecoins are the things that will improve customer protection.
Stablecoin Issuers Extract Deposits from the Banking Zone, Says Beck
Beck remarked that in this way the additional capital and resources will be allured to this evolving zone of economic operations. While responding to the questions asked by Robert Villaseñor – the general counsel of MoneyGram and a working group participant – Beck disclosed that Circle as well as the rest of the issuers of stablecoins were keeping assets at the rest of the organizations.
He was of the view that a few stablecoins were specifically susceptible to run, likely posing a risk to the economy. That’s why, he suggested, giving the stablecoin matter in the hands of banks would guarantee the fulfillment of the Know Your Customer rules.