Kevin O’Leary predicts that this Stablecoin regulation will increase crypto prices
As the global crypto market struggles to surpass $1 trillion in cumulative market capitalization, Shark Tank star Kevin O’Leary believes potential upcoming stablecoin regulations could be the next thing to energize the market.
In a recent interview, ‘Mr. Wonderful’ opined that when “regulations come, Bitcoin goes up,” explaining that “if institutions smelled politics, you got a real spike.”
Stablecoin regulations could disrupt Bitcoin
O’Leary believes the Stablecoin Transparency Act has a chance to pass in the US after the November 8 midterm elections. He stated, “Now this has nothing to do with Bitcoin, but it has a lot to do with the tone of regulation. And the reason I think it’s interesting is that they’re trying to address the challenges that happened in these collapses of stablecoins that were built around algorithms, and $62 billion was deleted.
Under the bill introduced in the Senate, a stablecoin issuer is required to hold reserves of either specific government securities, fully collateralized repurchase agreements for securities, US dollars or other non-digital currency. The bill specifies a “fiat currency-backed stablecoin is a digital asset backed by a non-digital currency and redeemable on a one-to-one basis in that currency.”
In addition, each stablecoin issuer is required to publish a monthly report on the reserves held, audited by a third party.
“This act is very simple, and that’s why it can pass. It’s supported by both parties. And the reason that’s the case is that, secondly, it makes the US dollar the standard payment system around the world. Which everyone can get behind, the Shark Tank star said.
“So if you have USDC or some other stable coin backed by the dollar, and the test to get it regulated is very simple. You’re going to be audited every 30 days, it has to be backed up one-to-one with US dollars or T-bills, all the T-bills backing the coin or token must have a duration of less than 12 months. And if you’re willing to go through that scrutiny, they’ll let them issue you a license.”
BTC price struggles to surpass $20,000
Kevin O’Leary argues that while the bill does not specifically refer to Bitcoin, the first stablecoin regulations passed by US regulators make a solid case for being optimistic about BTC.
At press time, however, the Bitcoin price in the 24-hour range was $19,112 and $19,342 on CoinGecko, well below the crucial $20,000 level. While the royal coin has registered minor gains over the past day, it has largely stayed in range over the past month.
According to IntoTheBlock research, 48% of coin holders are losing money at current price levels. Meanwhile, only 5% breaks even with the rest of the holders in profit. Most of the chain signals at press time remain bearish for BTC.
BeInCrypto research also doesn’t show much optimism in the short term. However, chain analyst PlanB believes that BTC has now reset its range, replacing the old $4,000 low to the crucial $20,000 level.
Despite the decline, the analyst remains optimistic and suggests collecting more coins at the current levels.
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