Thread by @CaitlinLong_

1/ THIS IS WHERE WE ALWAYS THOUGHT the #stablecoin regulatory direction would go, which is why @AvantiBT chose to get a bank charter. Anything that touches the USD financial system was always going to fall w/in the Fed's purview, directly or indirectly, esp once it became big.

https://twitter.com/amacker/status/1443974661948284950

2/ Plus it makes sense policy-wise. Nonbank #stablecoin issuers gum up the #repo mkt by siloing T-bills & other Level 1 high-quality liquid assets (the repo mkt already finds these assets too scarce). If stablecoin issuers are banks, tho, dormant Fed reserves can be used instead.

3/ Details on the above point are here👇. The v high velocity of #stablecoins comes from their superior tech vs trad payment systems, not from leverage. Traditionally, monetary velocity came from leverage. But thanks to stablecoins it no longer needs to.💪
cato.org/cato-journal/s…

4/ Creating monetary velocity without leverage is inherently safer & more stable to the USD financial system than using leverage to create velocity, which again is how the banking system traditionally worked. Really, this policy is win-win from US financial system stability POV💪

5/ But achieving this requires the Fed to grant payment system access to #stablecoin issuers once they become banks (as @AvantiBT already is). Big banks' DC lobbyists are fighting all of us like mad--they want this mkt to themselves. (Funny tho--the NY bankers keep calling me!🤷‍♀️)

6/ What's interesting about DC news flow on #stablecoins is that DC seems to forget that the US has a dual banking system. ~80% of the banks in the US are state-chartered, not federally-chartered. State regulators matter & they're already ready to go (before DC is).

7/ States like #Wyoming have a ready-made bank charter for #stablecoin issuers that could be adopted by DC today. (Note @AvantiBT's application for Fed payment system access has been pending for 1 year & our biz plan includes issuing a #stablecoin-like bank deposit called #Avit.)

8/ So reg picture is playing out pretty much as we at @AvantiBT expected. The big question now is if the big banks will succeed in blocking out #crypto-native companies like us. As I've said b4, the knowledge frontier in #crypto isn't in big banks--it's where the developers are🤠