Picture a world where artists are truly free. No longer do they depend on art galleries who charge exorbitant commissions or music labels who stifle their creative flow. Picture an artist in rural Cambodia selling a painting directly to an urban New York City collector. And they can do this transaction in real-time, not get charged outrageous processing fees! This isn’t an environmentalists’ pipe dream — it’s something stablecoins could help. But only if Congress takes the time to get the regulations right. They are well on their way to designing a gilded cage for Wall Street. In the process, they are burning artists and emerging markets.
Forgotten Voices, Remembered Revenue Streams?
The narrative about stablecoin regulation is largely focused on institutional investors, systemic risk, and the dollar’s global hegemony. All of these points are important, but let’s get to the good stuff, shall we? How will this technology help creators unlock more opportunities and increase economic access for BIPOC creatives and underserved communities? It’s an exciting time for the digital art revolution that’s happening right under their noses. Unfortunately, right now Congress is just a little too focused on the stock ticker to look up and notice.
I have witnessed myself the struggles of artists, particularly interdisciplinary artists, in South East Asia. They encounter lack of access to capital, extraction by predatory middlemen, and difficult, costly, cross-border payment systems. Stablecoins could be a game-changer, offering a direct and transparent way to receive payments, bypass traditional banking hurdles, and build a global audience. This is more than an art initiative; it’s an act of economic empowerment. It’s about empowering people to take charge of their financial futures.
Here's the outrage: the current stablecoin bills in Congress are largely silent on these issues. They focus on safeguarding the financial system (important!), but neglect the opportunity to create a more inclusive and equitable financial landscape. While well-meaning, the GENIUS Act and the STABLE Act may unintentionally reinforce the status quo. Consequently, Wall Street wins while artists and emerging economies lose. It seems like an enormous betrayal of the very promise of decentralized finance.
Tether's Shadow, Artists' Dimming Light?
One of the biggest dangers of the current legislative proposals is the "Tether Loophole" – the inadequate regulation of offshore stablecoin issuers. Picture this: US-regulated stablecoins are burdened with compliance costs. At the same time, these actions leave unregulated offshore actors like Tether unchecked to continue to operate with no oversight, often enabling illicit finance and undermining the entire regulatory apparatus.
This isn’t an academic concern – it’s a clear and present danger. If Congress does not come together to shut this loophole, it will be doing just that in establishing a two-tiered system. Responsible US issuers all lose out, and artists and users will bear the risks from an unregulated stablecoin. Think of it like this: you're trying to build a safe and reliable highway system, but you leave a gaping hole in the middle for unregulated vehicles to drive through. Chaos ensues.
Who suffers most? On artists and small businesses that are already having a hard time figuring out the ins and outs of the traditional financial system. They don’t demand much, just a level playing field — not one purposely stacked in favor of unregulated offshore competitors. This is a moral imperative and economic justice issue.
Innovation's Spark, Or Wall Street's Dark?
Let's be clear: no one is arguing that stablecoins should be a free-for-all. Illicit finance is every bit as serious a concern, and strong consumer protections are more necessary than ever. Yet the bills as currently drafted threaten to be too broad, chilling innovation and negatively impacting legitimate users — especially in developing markets.
The legislation must ensure robust consumer protections while allowing room for innovation to thrive. It must empower the Treasury Department to effectively combat illicit finance. Simultaneously, it needs to be careful not to go too far with sweeping measures that would have disproportionate impacts on artists and communities. We have to develop new consumer protections, which address the distinct needs of subsets of users. This includes artists and those in developing countries.
For example, think about how exceedingly burdensome regulatory requirements affect cross-border payments. But if artists in regions such as Southeast Asia can’t use stablecoins because it’s made too difficult or expensive, they will suffer the consequences. Otherwise, they’ll have to continue to use existing payment systems that are costly, cumbersome and confusing. This is an unfortunate missed opportunity to ensure a heavier focus on integrating our economies in more efficient, inclusive, and equitable ways.
The current bills likewise ignore the all-important issue of access to Federal Reserve master accounts. Without access to these accounts, stablecoin issuers may have to resort to traditional banks. This dependence creates higher costs and longer wait times. Expanding access to master accounts would help ensure that private sector entrants in the stablecoin market are on a competitive, more equal footing. This is critical, in particular, for smaller issuers who are mission-driven to serve niche markets like artists and creators.
What’s at stake isn’t merely the technical minutiae of blockchain — it’s who gets to shape the future of finance. Or are we going to create a system that works for us — not for Wall Street? Or will we fold and produce one that continues to disenfranchise artists and underserved communities?
Contact your representatives in Congress and tell them that you support stablecoin regulations that prioritize inclusivity, innovation, and consumer protection. Remind them that as they write these Title VI regulations, they must be mindful of the needs of artists and underserved communities. Tell them that the future of finance depends on it. The time to act is now.
