The US Congress is looking to bring stablecoins deeper into the regulatory fold.
And potentially the broader global financial system.
A new 73-page draft bill, published Saturday (April 15) by the US House Financial Services Committee is proposing that the Federal Reserve’s board of governors be given oversight of nonbank entities and digital asset firms looking to issue stablecoins.
The discussion draft, titled “A bill to provide requirements for payment stablecoin issuers, research on a digital dollar, and for other purposes,” lays out a series of stricter rules around the issuance of dollar-pegged digital assets across both the federal and state level, as well as establishes requirements for interoperability, reporting and enforcement.
It represents the first major piece of crypto legislation that lawmakers have so far shared in 2023.
Read more: FTX, Congress, Stablecoins: What 2023 May Bring For Crypto Regulations
The draft also proposes a two-year moratorium on the creation and issuance of algorithmic stablecoins as well as those backed by other cryptocurrencies, and it separately includes a request by the U.S. Treasury to study the feasibility and working impact of a digital dollar central bank digital currency (CBDC).
Penalties for firms and platforms that issue stablecoins without regulatory approval include prison time of up to five years, as well as a $1 million fine.
Jeremy Allaire, CEO of crypto company Circle, which issues the USD Coin (USDC) stablecoin tweeted Saturday that the bill represents “an extraordinary moment for the future of the dollar in the world, and the future of currency on the internet.”
Circle’s USDC stablecoin is the second-largest dollar-pegged token by both market capitalization and circulating supply, behind Tether’s USDT stablecoin and ahead of Binance USD’s BUSD coin.
Both USDT and BUSD have separately come under scrutiny in recent months, and USDC was temporarily de-pegged from its $1 backing following the collapse of Silicon Valley Bank (SVB), where Circle kept $3.3 billion of its assets.
“There is clearly the need for deep, bi-partisan support for laws that ensure that digital dollars on the internet are safely issued, backed and operated,” Allaire tweeted, adding that “there are clearly open and challenging issues with the bill as proposed.”
“It’s time for U.S. leadership, and that means clear regulation and empowering entrepreneurship and innovation within the framework of U.S. prudential law… now is the time for our country and political leaders to really dig in and get this right,” he added. “The role of the dollar in the world is at stake.”
Featured News
T-Mobile Faces Class-Action Lawsuit Over Sprint Merger After Appeal Denied
May 16, 2024 by
CPI
Google Faces Backlash Over Introduction of AI-Generated Summaries in Searches
May 16, 2024 by
CPI
CMA Launches Phase 2 Probe into AlphaTheta’s Acquisition of Serato
May 16, 2024 by
CPI
NFL Executive Escapes Testifying in High-Stakes Trial Over Televised Games
May 16, 2024 by
CPI
EU Consumers Lodge Complaint Against Chinese Retailer Temu Over Content Rules Breach
May 16, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI