In a significant development for the crypto world, Circle’s USD Coin ( $USDC ) and other stablecoins are facing potential compliance hurdles due to a new national defense bill that has recently passed the United States Senate.
Berenberg analyst Mark Palmer has shed light on an amendment to the 2024 National Defense Authorization Act ( #NDAA ), which could introduce stringent Know Your Customer (KYC) and anti-money laundering measures that stablecoin issuers may find challenging to meet.
Examining the Implications of the NDAA Amendment
The recent amendment to the NDAA mandates the U.S. #Treasury Secretary to establish examination standards specifically tailored to crypto assets.
The objective is to aid regulators in ensuring strict compliance with anti-money laundering and sanctions laws.
While the intent behind these measures is to enhance financial security and transparency, analysts like Mark Palmer express concern that the implementation of such standards could present difficulties for stablecoin issuers like USDC.
Palmer emphasizes that the identities of stablecoin holders can only be ascertained during the issuance and redemption of the assets.
If the amendment remains part of the final version of the NDAA, it might lead to a challenging situation for stablecoins in terms of complying with the new requirements, potentially impacting USDC’s market cap adversely.
Read more: https://perseuscrypto.com/crypto-news/us-defense-bill-may-pose-challenges-for-usdc-and-stablecoins/
