The US has introduced laws to regulate stablecoins, with two prominent bills: the GENIUS Act and the STABLE Act.
*Key Provisions of the GENIUS Act:*
- *Reserve Requirements*: Stablecoins must be backed 1:1 with liquid assets, such as US Treasuries.
- *Audit and Compliance*: Issuers with a market capitalization exceeding $50 billion will undergo annual audits.
- *Regulatory Oversight*: Federal or state regulators will oversee stablecoin issuers to enhance transparency and consumer protection.
*Key Provisions of the STABLE Act:*
- *Reserve Requirements*: Stablecoins must be backed 1:1 with safe, liquid assets, such as cash or central bank balances, and US Treasuries with maturities under 93 days.
- *Consumer Protection*: Custodial intermediaries must segregate customer assets from their own, and issuers must provide monthly disclosures on reserve holdings.
- *Bank Secrecy Act*: Stablecoin issuers must comply with anti-money laundering (AML) and know-your-customer (KYC) regulations ¹ ² ³.
*Global Regulatory Landscape:*
- *European Union*: The Markets in Crypto-Assets (MiCA) framework mandates comprehensive digital asset classification, mandatory authorization for stablecoin issuers, and enhanced consumer protection standards.
- *Asian Countries*: Diverse approaches to stablecoin regulation, ranging from strict prohibition in China to progressive regulatory environments in Singapore ⁴.
*Impact on Stablecoin Issuers:*
- *Compliance*: Issuers must navigate complex regulatory requirements, including reserve requirements, audit and compliance, and consumer protection.
- *Transparency*: Issuers must provide regular disclosures on reserve holdings and transaction volumes.
- *Regulatory Uncertainty*: Issuers face uncertainty regarding the classification of stablecoins and the regulatory framework that applies to them ⁴ ¹.
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