Opinion: control over centralized stablecoins will be tightened

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Over time, global regulators will require tighter control over the movement of centralized stablecoins, said Linda Xie, co-founder of Scalar Capital. There are almost 40 addresses on the Tether blacklist, and USDC has one.

USDC developers added the first Ethereum address to the blacklist. The transaction, viewed through blockchain explorer Etherscan, shows that a “blacklist(address investor)” function was called on June 16, 2020, by 0x5dB0115f3B72d19cEa34dD697cf412Ff86dc7E1b, an address owned by CENTRE, the entity issuing USDCs.

The blacklisted wallet contains 100,000 USDC. Later, the consortium explained that they added the address to the black list in accordance with the request of law enforcement agencies, but refused to disclose the details of this request. In a comment on Etherscan, one user wrote that the wallet stores tokens stolen from him.

The black list of the most popular stablecoin Tether (USDT), which accounts for more than 80% of the total stablecoin market, contains 39 addresses. All wallets are on the Ethereum blockchain. The reasons of blacklisting were never disclosed.

Scalar Capital co-founder Linda Xie believes that the appearance of the first address on the USDC blacklist indicates a trend towards more stringent regulation of the stablecoin market.

“Prediction: Eventually USDC and similar regulated, centralized stablecoins will only be able to send to whitelisted addresses that have been KYCed/pre-approved in some way. Or at least above a certain $ amount.”

Lawyer Jake Cherwinsky considers it significant that the Ethereum address is blacklisted by USDC. “USDC blacklisting has gone from a hypothetical concern to a real risk. CENTRE should now explain in detail what criteria it uses in deciding when to blacklist an address. Was this compelled by court order or done voluntarily? Is there a process for appeal? Etc.”

Via: 2Coinfox.info

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