Elon Musk-backed Stablecoin Launch via X Platform Sparks Crypto Legislative Debate
Musk recently rebranded Twitter to the X platform in a bid to venture into global financial markets through modern technology like blockchain and AI.
On July 20, the United States Federal Service announced the official launch of its new system for instant payments dubbed the FedNow Service with 35 banks and credit unions already integrated. The move stirred different reactions from investors arguing that the Fed is slowly rolling out the digital dollar, while some states like Florida are against the move. As a result, large tech companies in the United States are already exploring the launch of US dollar-backed or algorithmic stablecoins.
For instance, tech billionaire Elon Musk recently announced the transition of Twitter to his everything app dubbed X platform. Notably, Musk revealed earlier this week that the X platform intends to grow into a major global financial hub. As a result, speculations on the X platform integration with crypto assets like Bitcoin and Dogecoin have significantly increased in the past few days. Additionally, experts believe Musk could soon launch a stablecoin to support payments on the X platform.
Musk’s X Platform and Stablecoin Launch
On Wednesday, the United States House Financial Services Committee passed seven pieces of legislation out of the Committee that establishes a regulatory framework for payment of stablecoins and protects self-custody for digital assets, among others. The Clarity for Payment Stablecoins Act, which was introduced by Chairman Patrick McHenry, recognizes several regulatory paths for approving and regulating stablecoin issuers while protecting consumers. Notably, the bill was passed by a bipartisan vote, thus bringing stablecoins regulation much clearer in the United States.
#BREAKING: Chairman @PatrickMcHenry‘s Clarity for Payment Stablecoins Act passes the Financial Services Committee with BIPARTISAN support.
After fifteen months of bipartisan collaboration, this landmark legislation is one step closer to becoming law. pic.twitter.com/vCiyqjyAAf
— Financial Services GOP (@FinancialCmte) July 28, 2023
However, some legislators have voiced their fears over big tech companies and billionaires like Musk obtaining the rights to mint stablecoins. Essentially, the United States lawmakers argue the Fed is the only entity mandated to print or mint new cash as the government provides essential services to the people and taxes them less. The argument has, nonetheless, not resonated well with all investors, more so those who advocate for decentralization and freedom of democratic financial expression.
Bipartisan fears of an Elon Musk stablecoin cloud crypto legislative debate
A bill regulating stablecoins is expected to pass the House Financial services committee
Lawmakers on both sides of the aisle expressed fears that stablecoin legislation set to pass the House Financial…
— *Walter Bloomberg (@DeItaone) July 27, 2023
With Musk’s X platform destined to venture into Web3 markets, experts believe that it is only a matter of time before the tech billionaire launches stablecoins that run on a distributed ledger. However, Musk is likely to face a similar regulatory hurdle that Mark Zuckerberg faced with the Diem project, which Facebook abandoned.
Bigger Picture
The reset of the global financial systems was arguably triggered by the Covid-19 pandemic and the rise of digital payments, more so crypto assets. Furthermore, most governments have accelerated the cash printing process, thus further worsening the inflation menace. As a result, most investors have been fleeing to formerly perceived as risky assets like Bitcoin to hedge against rising inflation.
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