Why Rohan Grey Believes Stablecoin Issuers Need to Be Banks

Rohan Grey, assistant professor at Willamette Law, talks about the STABLE Act, which would require stable coin issuers to obtain a banking charter, require approval from the Federal Reserve and require issuers to have FDIC insurance. In this episode, Grey, an advisor to the bill, discusses:

how the past history of financial innovation and events that have posed systemic risks necessitates the STABLE Act
how he, not being a staff member of Congress, became involved in the bill
how the bill would prevent stablecoin issuers from committing crimes that banks have perpetrated by requiring them to become banks
why he believes open source smart contracts enforcing rules and public audit-able blockchains are not a fundamentally new way to prevent the type of events that pose systemic risks that the STABLE Act aims to prevent
why existing regulatory and licensing regimes are insufficient
how he would answer people from countries like Argentina who have had their currency devalued by their government the STABLE Act, and who might say this bill exposes them to a different type of risk
how much the rollout of Facebook’s Diem, as opposed to existing stablecoins such as Tether, USDC or Dai, was a motivation for this bill
whether, by focusing narrowly on systemic risk, this bill could squash crypto and fintech innovation that could help the un- and under-banked
whether he sees any path forward for this bill to be passed