Coinbase opposes Brazil’s proposed stablecoin regulation, citing concerns it would hinder adoption and user operations. Tom Duff Gordon stresses the importance of self-hosting wallets for decentralized finance and presents alternatives to address AML and KYC issues. The proposed regulation could impact decentralized finance applications, which rely on stablecoins for various financial activities.
Coinbase has raised significant concerns regarding a proposed regulation affecting the stablecoin market in Brazil. Tom Duff Gordon, Vice President at Coinbase, articulated that worries about the illicit use of stablecoins could be addressed without stifling adoption or impacting legitimate users utilizing these assets in their business operations.
The proposed regulation by Brazil’s central bank aims to ban the withdrawal of stablecoins to self-hosted wallets, driven by apprehensions related to money laundering and tax evasion. Gordon commended the central bank’s willingness to consult with stakeholders before implementing such measures but criticized the proposal’s extensive implications for stablecoin transactions in the country.
Gordon believes the central bank could benefit from reassessing the proposal, emphasizing, “Stablecoins will be fundamental to the development of the future internet and decentralized finance, and self-custodial wallets play an essential role in this ecosystem.” Moreover, he indicated that Coinbase has actively participated in the public consultation process, offering alternative solutions that address concerns about anti-money laundering (AML) and know your customer (KYC) practices.
Brazilian authorities have been scrutinizing the expanding stablecoin market, particularly its growing use in remittances. This scrutiny led to proposals to tax such activities and a suggested ban on withdrawals to self-custody wallets, deemed necessary to monitor potential outflows more effectively. However, these measures could inadvertently criminalize decentralized finance applications, which predominantly utilize stablecoins for yield-staking activities, possibly restricting legitimate financial tools available to Brazilian citizens.
In conclusion, Coinbase’s objections to the new stablecoin regulation in Brazil highlight the balance between regulatory concerns and the need for innovation in the cryptocurrency space. The input from Coinbase suggests a proactive approach to compliance without limiting user freedoms, emphasizing the potential of stablecoins in shaping future financial environments.
Original Source: news.bitcoin.com
