{"id":20510,"date":"2023-08-01T06:27:26","date_gmt":"2023-08-01T06:27:26","guid":{"rendered":"https:\/\/nftandcrypto-news.com\/crypto\/us-defense-bill-may-be-problematic-for-usdc-and-stablecoins-analysts\/"},"modified":"2023-08-01T06:27:27","modified_gmt":"2023-08-01T06:27:27","slug":"us-defense-bill-may-be-problematic-for-usdc-and-stablecoins-analysts","status":"publish","type":"post","link":"https:\/\/nftandcrypto-news.com\/crypto\/us-defense-bill-may-be-problematic-for-usdc-and-stablecoins-analysts\/","title":{"rendered":"US defense bill may be \u2018problematic\u2019 for USDC and stablecoins: Analysts"},"content":{"rendered":"
Circle\u2019s USD Coin (USDC) and other stablecoins could potentially face a compliance nightmare if a new national defense bill that passed in the United States Senate makes it all the way.<\/p>\n
In a July 31 investment note seen by Cointelegraph, Berenberg analyst Mark Palmer explained that a recent amendment to the 2024 National Defense Authorization Act (NDAA), could potentially introduce new KYC and anti-money laundering measures that stablecoin issuers will be unable to comply with.<\/p>\n
\u201cThe amendment would require the U.S. Treasury Secretary to \u2018establish examination standards for crypto assets\u2019 that would help regulators to ensure compliance with money laundering and sanctions laws,\u201d wrote Palmer, adding:<\/p>\n
\u201cWe believe this amendment, if it remains in the final version of the NDAA, could be problematic.”<\/p><\/blockquote>\n
Palmer explained that the identities of stablecoin holders can only be determined when the asset is issued and redeemed.\u00a0\u201cSuch an outcome would likely cause further deterioration in USDC\u2019s market cap,\u201d he warned.<\/p>\n
In recent months, USDC\u2019s market cap has been on the decline, falling $17.5 billion \u2014 roughly 39% \u2014 since March 5. <\/p>\n
Knock on effects for Coinbase<\/h3>\n
While this could be a significant setback for Circle, it could also prove problematic for Coinbase, said Palmer, noting the exchange \u201cderived 27% of its net revenue from interest income on USDC\u201d in the first quarter of this year. <\/p>\n
Since the beginning of the year, Coinbase shares have drastically outperformed the traditional equities market, surging 170% from a price of $33 on Jan.1 to $98.61 at the time of publication. <\/p>\n