A draft stablecoin bill in Congress would require the Federal Reserve System and state banking regulators to approve any stablecoin program by a non-banking entity before it can be legally issued.
Issuers of stablecoins approved by state regulators must register with the Fed within 180 days to legally continue to operate, media Report said Wednesday, claiming access to the draft bill.
in July, encrypted potato Stablecoin bill is reported to be Delay The delay was more than a month due to last-minute changes proposed by Treasury Secretary Janet Yellen. She argues that legislation should provide for the separation of client assets from wallet custodians to protect them in a bankruptcy situation.
In June, Japan passed a similar bill recognizing stablecoins as digital currencies Must be pegged to Japanese Yen or other fiat currency.
Banned the use of the Algo stablecoin
New stablecoins backed by assets created by the same issuer or “endogenously collateralized stablecoins” will be banned for at least the next two years. Any such existing stablecoins will be required to change their business model and obtain new approvals from the relevant authorities within two years.
Stablecoins issued without proper approval from designated regulators would be illegal, punishable by up to five years in prison and a $1 million fine. The bill envisions such cryptocurrencies backed by cash or highly liquid assets such as Treasury bonds.
The draft legislation seeks to create a regulatory framework around stablecoins and requires the Federal Reserve to study the economic impact of a U.S. dollar digital dollar (CBDC). It also called for research into algorithmic stablecoins in consultation with the Federal Reserve, the Federal Deposit Insurance Corporation, the OCC and the Securities and Exchange Commission.
Banks need regulatory approval
According to media reports, the draft legislation says banks and other traditional financial institutions need approval from federal banking regulators, the Office of the Comptroller of the Currency (OCC) and the Federal Deposit Insurance Corporation.
It also addresses stablecoin interoperability issues and empowers federal banking regulators and state regulators to set standards. The bill aims to align stablecoin assets and accounting standards with banks and credit unions.
The draft legislation prohibits mixing customer funds and their keys with funds from stablecoins and other assets so that users can quickly redeem their investments in the event of insolvency or bankruptcy.
it may vote at any time
The draft bill is being negotiated between House Financial Services Committee Chair Maxine Waters and Rep. Patrick McHenry. It is still possible to change it as it has not been approved by Waters and McHenry.
While no date has been set for the hike, the committee could vote on the bill as early as next week, as it won’t be able to consider it until the end of the year, and the upcoming midterm elections don’t leave much room. further delay.
