The U.S. Congress released a new bill to provide a regulatory framework for stablecoins in the country.
U.S. lawmakers released the text of the bill, which would “provide requirements for payment stablecoin issuers,” in the House of Representatives’ document repository. The new legislation is scheduled to be debated on April 19.
According to the document, two state agencies would be regulators of the stablecoin market:
- The Federal Reserve will control the issuance of non-bank stablecoins like USD Coin (USDC) or Tether (USDT).
- A special Federal Banking Agency will oversee the issuance of stablecoins by insured depository institutions.
All companies willing to issue a stablecoin in the country will have to undergo mandatory registration with the relevant agency and prove:
- the security of their reserves and their ability to maintain them;
- the technical security of the software used;
- transparency of management processes within the issuing company;
- the need for a new financial instrument; in particular, its ability to improve financial accessibility in the country.
Issuers outside the U.S. will have to obtain registration to do business in the country and get approval from the Fed. The document states that failure to register could result in up to five years in prison and a $1 million fine.
The lawmakers also propose to veto the issuance, creation, and use of algorithmic stablecoins. Thus, unsecured stablecoins would be banned in the U.S. for at least the next two years. At that time, the U.S. Department of the Treasury must conduct a thorough study of “endogenously collateralized stablecoins,” that is, stablecoins secured by another digital asset, in order to make a decision about their use.
The U.S. government reserves the right to control interactions between various stablecoins in the country. The document also states that the White House supports the Fed’s digital dollar initiative (CBDC) and will support further research in this direction.
The other day, CEO of Stellar Denelle Dixon shared her opinion that stablecoins can strengthen the U.S. dollar in the global market in case of the development of government standards for this kind of assets. And officials in Texas suggested introducing a gold-backed digital currency instead of issuing CBDCs.
