Nebraska Digs Its Heels Into Regulating Stablecoins

Nebraska is digging in its heels in regulating digital assets, especially stablecoins.

Nebraska is digging in its heels when it comes to regulating digital assets, especially stablecoins.

This stance came to light during a recent hearing with state lawmakers, who made it clear they want to keep this domain firmly in state hands.

The focus fell on a new federal bill that would create a regulatory framework for private stablecoins, an initiative touted by Rep. Steve Flood, who also championed the Nebraska Financial Innovation Act.

This legislation, making Nebraska the second state to do so, sets up rules for digital asset custody institutions and enables them to issue stablecoins.

Also Included: The Latest Bitcoin Price Prediction From a Nobel Prize Winner

As the bill heads to a vote in the House, lawmakers are weighing how it would affect state-level regulation, specifically in the realm of stablecoins.

The bill provides for a dual regulatory system: states can either adopt federal standards or implement their own regulatory mechanisms that meet or exceed federal requirements.

This structure is intended to strike a balance between national uniformity and allowing states to introduce more stringent regulations as needed.

The hearing highlighted concerns over how federal laws might impact Nebraska’s efforts, particularly how the federal rules could clash with the state’s existing system.

The state lawmakers expressed their preference for keeping the initiative within the state's domain.

The state legislation, passed earlier this year, permits state-chartered banks to apply for special-purpose charters to engage in digital asset activities, including custody, trust services, and the issuance of stablecoins.

The intent is to enable greater innovation within a controlled regulatory environment.

However, if the state chooses to adopt the federal regulatory framework, it would no longer be able to continue its own initiative.

This scenario could arise if the federal bill imposes more stringent requirements than the state regulations.

The lawmakers also touched upon another pressing issue: Bitcoin ATM fraud.

While Nebraska is focusing on stablecoins, a different crypto problem is brewing nationwide.

Recent data shows a spike in fraudulent activities linked to Bitcoin ATMs, especially in Illinois, where Senator Dick Durbin is pushing for legislation to regulate these machines.

The problems encountered by individuals who fell victim to Bitcoin ATM fraud have prompted Durbin to introduce the Crypto ATM Fraud Prevention Act.

This bill is designed to provide the Federal Trade Commission with authority to pursue and halt fraudulent acts related to cryptocurrencies.

The goal is to safeguard consumers from such scams and create a safer environment for engaging with digital assets.

The new legislation builds upon Durbin's previous efforts to combat cryptocurrency fraud.

Earlier this year, he introduced an amendment to an FTC bill that aimed to grant the commission the ability to handle cases of cryptocurrency fraud directly.

However, this amendment was not included in the final version of the bill.

The focus on Bitcoin ATM fraud stems from a report by the FTC, which revealed a significant increase in such activity.

The report highlights how fraudsters are increasingly using cryptocurrencies to deceive individuals, especially the elderly, through fictitious investment opportunities or promising large returns.

In one instance, an individual lost $350,000 of their retirement savings after being induced by a con artist to invest in Bitcoin during a Zoom call.

The FTC is now urging individuals to be cautious of cryptocurrency investment offers, especially if they seem too good to be true.

The fibs related to cryptocurrency investment offers are heating up. Don't fall for them!

If something sounds too good to be true, it probably is. Report the scam to the FTC at https://t.co/R8s85Z117C. # FTC #scams

— Federal Trade Commission (@FTC) June 28, 2023

The administration of President Trump took a decisive step on Wednesday, announcing a new executive order to create a national Bitcoin reserve and a separate digital asset stockpile.

This move follows an earlier report by CoinDesk, which revealed that the administration was planning to assemble a presidential working group to oversee the development of a U.S. CBDC.

The president's executive order also directs federal agencies to study the potential risks and opportunities presented by cryptocurrencies.

The administration is tasked with assessing the feasibility of issuing a U.S. CBDC and determining the optimal legal and regulatory framework for such an initiative.

The president's executive order further directs the administration to investigate the possibility of a national Bitcoin reserve, focusing on the economic and geopolitical implications of such a reserve.

This investigation will also assess the potential impact on the U.S. dollar and the global financial system.

Additionally, the president's executive order calls for the creation of a digital asset stockpile, examining the optimal types and quantities of digital assets to be included in the stockpile.

The administration will also assess the best practices for managing and deploying the stockpile to serve U.S. interests.

The president's executive order sets a time frame of 180 days for completing these tasks, effectively placing the deadline for finishing these initiatives in February