- Coinbase CLO Urges Quick Action to Address Illegal Financial Issues.
- The US Deputy Treasury Secretary highlights terrorists’ increasing dependence on virtual assets.
Stablecoins play a crucial role in linking traditional fiat currencies to the digital asset space, providing a fixed value typically pegged to the US dollar. However, as demand for stablecoins increases, so do concerns about illegal financing.
Saying the same about this, Coinbase’s Chief Legal Officer (CLO) said: Paul Grewal in his recent X (formerly Twitter) post he noted:
“One thing is clear: if we want to seriously tackle the small percentage of IF (illegal financing) carried out with digital assets, we must pass stablecoin legislation now.”
The involvement of politics and terrorist groups
The Coinbase executive’s comments came in light of news that the Senate Banking Committee will hold a hearing on April 9 on combating illicit financing, terrorism and sanctions evasion.
Grewal underlined the importance of tackling important issues without the involvement of politics, noting:
“US security interests are served by centering dollar-denominated stablecoins in the home of the dollar. Rules for managing reserves, redemption rights and things like that are not difficult to tackle if we have the will to do more than politics.”
In addition, the misuse of cryptocurrencies by terrorist groups Adewale O. Adeyemo, Assistant Secretary of the United States Department of the Treasury in a written testimony elaborated,
“Five years ago, al-Qaeda and related terrorist groups, largely based in Syria, operated a… Bitcoin money laundering network that uses social media platforms to solicit cryptocurrency donations.”
He added:
“More recently, in the past year, we have seen the Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) Transfers Cryptocurrency to Hamas and Palestinian Islamic Jihad (PIJ). Gaza.”
This highlights that while terrorists may currently gravitate toward traditional financial channels, the absence of congressional action could fuel their increasing reliance on virtual assets.
Stablecoins instead of Bitcoin ETF
Amid growing demand for stablecoin legislation, Markus Thielen, founder of 10x Research, highlighted this in an April 8 report.
“We recommend paying less attention to Bitcoin ETF flows. Stablecoin issuers are the new sheriff in town and are driving this market higher.”
From the last update of Forbesthe market cap of stablecoins stands at $155.55 billion, with a slight decline of 0.01% in 24 hours. Moreover, Tether’s market capitalization rose 0.25% over the past day, while USDC saw a decline of 1.16%.
This underlines the surge in stablecoin supply, indicating rising demand. Does this indicate a bullish crypto market dominating Bitcoin ETF inflows?