New York Attorney General Letitia James has called on Congress to strengthen stablecoin and crypto legislation, citing a lack of investor protections.
James's Position on Stablecoin Bills
Letitia James stated in her letter to Congress that the STABLE and GENIUS Acts do not adequately protect the American public. She emphasized that the current versions lack necessary measures to prevent fraud and protect national security. ‘Unregulated cryptocurrency transactions are a danger to investors, the economy, and national security,’ she said.
Call for Regulation of Stablecoin Issuers
James urged Congress to amend the bills so that stablecoin issuers would be regulated like banks. She said, ‘Given that stablecoin issuers essentially function as banks, they should be subject to the same regulations to reduce systemic risk.’ She also suggested providing insurance protection for stablecoin deposits and requiring digital identity technology for all transactions.
Critique of Other Digital Asset Bills
James also criticized the Digital Asset Market Clarity (CLARITY) Act, arguing it protects bad actors’ anonymity and fails to provide adequate fraud prevention measures. She noted that the proposed legislation creates a technology-specific loophole that undermines nearly a century of securities laws designed to protect investors.
James's call to Congress underscores the need for stricter regulation of the cryptocurrency and stablecoin market, which could enhance investor protection and financial security.
