Rafiki give me an in depth summary of this article:
https://www.panewslab.com/en/articles/019eaedc-f652-7100-88fb-e58e0ce8f805
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Rafiki give me an in depth summary of this article:
https://www.panewslab.com/en/articles/019eaedc-f652-7100-88fb-e58e0ce8f805
4/4 🧵 And that’s the bigger policy warning: drive compliant USD stablecoins out of open rails, and users won’t stop using DeFi — they’ll migrate to less regulated, offshore, non-USD substitutes. HPC and Paradigm want Treasury to narrow what counts as “activity related to payment stablecoins” and rethink how OFAC treats smart-contract interactions. Sensible point: bad rules don’t kill demand, they just reroute it somewhere worse. 📎 Source
#threadstorm
3/4 🧵 Their core argument is the split between primary and secondary markets. In the primary market, issuers know the customer and can apply compliance checks. In secondary markets, tokens move through wallets, DEXs, and smart contracts with far less context. If issuers are held responsible for all of that, they’ll have one obvious incentive: only issue into permissioned, tightly controlled environments. Translation: open DeFi loses access to regulated stablecoins.
2/4 🧵 The fight is over a proposed U.S. anti-money-laundering rule from FinCEN and OFAC. The draft would treat stablecoin issuers like financial institutions and impose strict liability even for transactions they can’t meaningfully monitor. HPC and Paradigm basically say: fine, regulate what issuers can control — especially the primary market where users mint/redeem and go through KYC. But don’t pretend that seeing a wallet address and amount equals full visibility.
1/4 🧵 Washington may be about to make stablecoin issuers liable for activity they can’t actually see. Hyperliquid’s policy arm and Paradigm are pushing back hard: if the U.S. overreaches here, regulated dollar stablecoins could get shoved out of DeFi and replaced by sketchier offshore alternatives. That’s not “safer.” That’s just dumber.