Coinbase has criticized Brazil’s proposed regulation on stablecoins, which seeks to ban withdrawals to self-hosted wallets due to concerns about illicit use. VP Tom Duff Gordon suggests that alternatives exist to address these concerns without stifling innovation or user access. The proposal, driven by rising stablecoin use and potential taxation, might negatively impact decentralized finance applications.
Coinbase has voiced its opposition to a proposed regulation in Brazil that aims to restrict stablecoin withdrawals to self-hosted wallets. Tom Duff Gordon, Vice President of Coinbase, believes that the concern over the misuse of stablecoins for illicit activities can be addressed without discouraging their adoption or affecting legitimate users. He commended the Brazilian central bank’s invitation for public consultation regarding the regulation but criticized the broad scope of the proposal.
The central bank’s proposal stems from concerns regarding money laundering and tax evasion associated with stablecoin use. It aims to prohibit withdrawals to self-hosted wallets, which could significantly limit the ability to manage these digital assets in Brazil. Gordon highlighted the potential consequences of these regulations, advocating for a reconsideration by the central bank.
Gordon emphasized the integral role of stablecoins in the development of the future internet and decentralized finance. He presented alternatives during the public consultation that would address the central bank’s concerns about anti-money laundering (AML) and know-your-customer (KYC) practices, suggesting that both security and innovation could coexist.
This move by Brazilian authorities, fueled by the rising usage of stablecoins for remittances, also includes plans for taxation on these activities. The intention behind banning withdrawals to self-custody wallets is to enhance oversight, as tracking such transactions poses significant challenges. However, restrictions on these withdrawals could jeopardize decentralized finance applications, which largely depend on stablecoins, thus impacting their legitimate utilization in Brazil.
In summary, Coinbase’s opposition to Brazil’s proposed stablecoin regulation highlights concerns regarding the balance between preventative measures against illicit activities and the promotion of innovation within the cryptocurrency sector. The alternatives suggested by Coinbase demonstrate a willingness to collaborate with regulators to ensure a conducive environment for both security measures and the lawful use of stablecoins.
Original Source: news.bitcoin.com
