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U.S. Congress criticized the stablecoins bill

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stablecoins bill

The House Financial Services Committee held its first hearing on the bill on stablecoins. Earlier, the document was presented by members of the House of Representatives Maxine Waters (California), and Patrick McHenry (Republican from North Carolina). According to the Democrats, the plan is outdated.

According to Waters, the bill was developed jointly, but negotiations on its provisions remained incomplete. In addition, there have been a lot of developments in the crypto industry since the document was drafted, including the collapse of the FTX cryptocurrency exchange. Waters added that the committee should “very quickly” pass an updated bill.

Also, House member Stephen Lynch (R-Massachusetts) said it was necessary to figure out “whether stablecoins are even needed. He agreed that the draft is significantly outdated and does not reflect any of the lessons learned from last year’s collapse of major cryptocurrencies.

However, that doesn’t mean the U.S. doesn’t need a stablecoins bill, McHenry noted. Stablecoins need to be regulated both domestically and internationally.

Earlier, the U.S. House Financial Services Committee released a draft of the stablecoins bill, which proposes to ban cryptocurrency-backed stablecoins and implement a digital national currency (CBDC). The need for such legislation came after two incidents involving stablecoins – the collapse of TerraUSD (UST), which was backed by the LUNA token, and the temporary decoupling of USD Coin (USDC) from the US dollar. The moratorium on stablecoins will remain in place until U.S. regulators investigate them.

This is not the first attempt by U.S. authorities to begin regulating stablecoins. Last year, the U.S. House of Representatives was about to vote on a stablecoins bill. However, it was delayed because it was not ready. In particular, the document did not consider the concerns of the U.S. Treasury Department on cryptocurrency depositories, as well as comments from the U.S. Securities and Exchange Commission (SEC).

Earlier, we reported that Congress criticized the head of the SEC for his stance on cryptocurrencies.

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Litecoin Falls 14% In Rout

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Litecoin was trading at $75.370 by 00:27 (04:27 GMT) on the Index on Saturday, down 13.99% on the day. It was the largest one-day percentage loss since June 10.

The move downwards pushed Litecoin’s market cap down to $6.255B, or 0.58% of the total cryptocurrency market cap. At its highest, Litecoin’s market cap was $25.609B.

Litecoin had traded in a range of $75.120 to $89.330 in the previous twenty-four hours.

Over the past seven days, Litecoin has seen a drop in value, as it lost 9.6%. The volume of Litecoin traded in the twenty-four hours to time of writing was $478.884M or 1.70% of the total volume of all cryptocurrencies. It has traded in a range of $75.1200 to $96.4700 in the past 7 days.

At its current price, Litecoin is still down 82.05% from its all-time high of $420.00 set on December 12, 2017.

Elsewhere in cryptocurrency trading

  • Bitcoin was last at $25,848.7 on the Index, down 2.43% on the day.
  • Ethereum was trading at $1,795.96 on the Index, a loss of 2.32%.

Bitcoin’s market cap was last at $510.447B or 47.04% of the total cryptocurrency market cap, while Ethereum’s market cap totaled $219.665B or 20.24% of the total cryptocurrency market value.

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Ripple case more crucial than ever amid Coinbase, Binance SEC crackdown: Lawyers

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The judges presiding over Coinbase and Binance’s lawsuits will likely watch the results of the SEC v Ripple case closely, crypto lawyers told Cointelegraph.

Ripple has been in a legal battle with the United States Securities and Exchange Commission since December 2020, with the regulator alleging that Ripple offered unregistered securities via XRP since 2013.

On June 6 the SEC filed a lawsuit against Coinbase also alleging that it has been offering unregistered securities. A day before it filed a lawsuit against Binance containing some similar allegations.

Lawyer James Murphy, known as “MetaLawMan” on Twitter, explained in a series of tweets on June 9 that a favorable outcome for Ripple could “undermine the entire basis for the SEC’s case” against both Coinbase and Binance.

However, he also warned that “before anyone gets too excited,” a ruling by Judge Torres in the Ripple case would not be “binding precedent” for these recent filings.

This means that the judges for the Coinbase and Binance lawsuit will “not be bound to rule the same way,” as only decisions of the Court of Appeals and the Supreme Court have that influence.

Speaking to Cointelegraph, pro-XRP lawyer John Deaton believes the SEC is “well aware” that Judge Torres’ decision in the Ripple case will be published “in the very near future.”

Deaton believes that the SEC purposefully filed these new cases ahead of that result, in case the regulator faces an unfavorable outcome in the Ripple case, stating:

“I believe the SEC wanted to get those cases filed before that decision just in case it is a bad result for the SEC, possibly causing it to lose some political and legal momentum.”

Murphy believes the judge assigned to the Coinbase case, Judge Reardon, “will pay very close attention” to the determination of whether XRP is a security or not, pointing out that they serve in the same court in lower Manhattan.

He believes that Reardon would “follow the same reasoning” as to whether the 13 tokens cited in the Coinbase complaint are securities, adding that this can go “both ways,” if it’s a favorable outcome for the SEC.

XRP-friendly lawyer Bill Morgan, a consultant at Morgan Mac Lawyers, also opined that the Ripple case could have an influence over the Binance and Coinbase cases.

Morgan explained that the outcome in the Ripple lawsuit can be used as an “advantage” for either the industry or the SEC, depending on the result.

“If they lose badly in the Ripple case, they go forwards with Coinbase and Binance with a substantial judgment against them. Obviously Coinbase and Binance will use that to their advantage that the sales of XRP is not an investment contract.”

Deaton noted that he actually predicted back in 2022 that the SEC would sue Coinbase and Binance “by the way the SEC was approaching the Ripple and XRP case.”

However, he believes that the SEC will tone down its action against crypto firms once the major financial institutions adopt a greater share of the crypto market.

“Once JPMorgan, Goldman Sachs or other traditional players get a bigger slice of the crypto market then the SEC will become more reasonable” he stated.

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Tether’s game plan in El Salvador: Why invest in Volcano Energy?

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Stablecoin issuer Tether has dipped into its war chest to invest in El Salvador’s $1 billion renewable energy project to help drive Bitcoin adoption in the Central American nation.

The Tether issuer is one of a handful of companies investing in El Salvador’s renewable power generation project. Volcano Energy is set to generate electricity from solar and wind energy in El Salvador to power future Bitcoin mining operations in the country.

The planned 241-megawatt (MW) renewable energy park is the latest move in El Salvador’s Bitcoin adoption drive after the country made BTC legal tender back in 2021.

Cointelegraph caught up with Tether’s chief technology officer Paolo Ardoino during Money 20/20 in Amsterdam. Ardoino — who is attending the renowned finance and payments convention promoting Bitfinex Pay and the Lightning Network — delved into several topics concerning Tether, Bitfinex and the wider cryptocurrency space.

Just two days before the interview, Tether announced it would be investing in Volcano Energy to gain exposure to energy production and leverage the facility to power Bitcoin mining farms in the future.

There is also an ideological element to the move, with Ardoino stressing his belief that El Salvador is blazing a trail for sovereign Bitcoin adoption despite the relatively slow uptake of BTC as a payment option in the country.

Ardoino drew parallels to the European Union adopting the euro as a continental currency in the early 2000s, which required significant resources to change existing financial infrastructure, as well as buy-in from citizens of its 27 member states.

“Given all the powers that they had, it still took five, six years, and yet people were super confused.”

The proliferation of Bitcoin as a payment method in El Salvador has had some teething problems, as explored by Cointelegraph journalist Joe Hall in a recent visit to the country using BTC as a primary means of payment.

Ardoino contends that the path to widespread BTC use and adoption in El Salvador will take time, considering that citizens are not being forced to use the alternative currency in their everyday lives:

“It’s extremely unfair to expect that the whole population will use Bitcoin because, first of all, it’s not forced. Adoption is through private companies and public investments, rather than being taxpayer money.”

Tether’s investment in the country’s energy production program is part of a two-fold strategy. Firstly, investing in energy-producing infrastructure holds its own value, which can then be utilized to power Bitcoin mining operations.

Ardoino also argued against the prevailing narratives around the environmental impact of Bitcoin mining and critiques of the industry for putting a strain on the global energy grid:

“Firstly, the majority of Bitcoin mining is already happening with renewable energy. Secondly, Bitcoin mining is mainly using excess energy anyway, but even more so if we first build the energy production.”

Ardoino said Tether’s investment alongside a group of 12 investors aims to build an energy production facility that companies, factories and households can also tap into. The excess energy from Volcano Energy will be used for BTC mining to help make El Salvador a “unicorn with its own unique story.”

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