- United Texas CEO recommends limiting the issuance of U.S. dollar-backed stablecoins to licensed banks instead of to issuers such as Circle.
- The CEO was addressing a gathering at the Texas Work Group on Blockchain Matters in Austin on Friday.
- He also argued that stablecoin issuers such as Circle were “effectively sucking deposits out of the banking industry.”
Chief Executive Officer of United Texas, Scott Beck, recommends limiting the issuance of U.S. dollar-backed stablecoins to licensed banks instead of to issuers such as Circle. Beck was addressing a gathering at the Texas Work Group on Blockchain Matters in Austin on Friday.
The Banking leader requested members of the state’s blockchain working group to recommend a policy for leaving stablecoins to banks rather than crypto firms.
He also referred to a report from the President’s Working Group on Financial Markets, in which the group had said that stablecoin issuers should be held to the same standards as insured depository institutions. This includes state and federally chartered banks.
In a controversial statement, the CEO argued that stablecoin issuers such as Circle were “effectively sucking deposits out of the banking industry.” He was responding to questions from MoneyGram General Counsel Robert Villaseñor. Beck argued that stablecoin issuers, such as Circle, were holding assets at “other institutions” in contrast to banks, “effectively sucking deposits out of the banking industry.”
Voicing his strong opinions on the matter, Beck said:
If such stablecoins are defined to be ‘money’, banks are the proper economic actor to issue and manage stablecoins. Banks have the expertise and legal framework for handling money, and unlike today’s stablecoin actors, banks are highly regulated at both the state and federal level.
Beck further went on to add that bringing stablecoin activities into the banking sector and prohibiting non-banks from issuing stablecoins would enhance consumer protection and attract additional resources and capital to this emerging area of economic activity.
The CEO’s statement gained mixed responses from the attendees at the meeting. Lee Bratcher, president of the Texas Blockchain Council, called Beck’s proposal anti-competitive.
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