Lawmakers are currently drafting legislation for stablecoins, with concerns about balancing anti-money laundering measures and financial privacy. Jennifer J. Schulp from the Cato Institute highlights the risk of surveillance as regulatory frameworks are considered in both the Senate and House. The proposed bills, including the GENIUS Act and the STABLE Act, aim to integrate stablecoin issuers under the Bank Secrecy Act. However, the existing framework mandates surveillance that could extend to peer-to-peer transactions not involving financial institutions. Unlike cash transactions, stablecoin transfers can be tracked, possibly leading to increased governmental oversight. Schulp argues that personal financial privacy should be paramount, and any legislation should not subject unhosted wallet transactions to greater scrutiny than cash transactions. Some sponsors of these bills have acknowledged the need to protect individual privacy and have suggested limiting the scope of surveillance requirements. Therefore, clear language in the legislation is vital to ensure that Americans can conduct transactions without unwarranted monitoring.

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