#USStablecoinBill The #USStablecoinBill refers to proposed legislation in the United States aimed at regulating stablecoins, which are digital tokens pegged to the value of the US dollar. This legislation is crucial as stablecoins have grown significantly, with a market capitalization of over $230 billion, and could become widely used for payments, driving innovation and competition.
*Key Provisions:*
- *Stablecoin Issuance*: The bill proposes that stablecoin issuers must be licensed and supervised by federal or state regulators, ensuring they maintain high-quality reserves and adhere to capital and risk management requirements.
- *Regulatory Requirements*: Issuers would need to maintain 100% reserves against issued stablecoins, limited to US dollars, demand deposits, certain US Treasury Bills, and repurchase agreements.
- *Consumer Protection*: The bill aims to enhance consumer protection through disclosure requirements, settlement procedures, and dispute resolution mechanisms.
*Pending Bills:*
- *GENIUS Act*: Introduced in the Senate, this bill requires issuers to implement measures to prevent illicit activity but has a foreign issuer loophole that needs addressing.
- *STABLE Act*: Introduced in the House, this bill provides an 18-month grace period for offshore issuers to comply with US regulations but lacks clear enforcement mechanisms.
- *Lummis-Gillibrand Payment Stablecoin Act*: A bipartisan bill introduced by Senators Cynthia Lummis and Kirsten Gillibrand, aiming to promote innovation while protecting consumers and mitigating illicit finance risks.¹ ²
*Challenges and Opportunities:*
- Closing the foreign issuer loophole to prevent regulatory arbitrage.
- Enhancing Treasury Department authority to prevent illicit finance.
- Balancing state and federal authority in regulating stablecoins.
- Limiting affiliate activities to prevent financial instability.
- Strengthening consumer protection provisions.
The US Congress is working to finalize stablecoin legislation, with experts emphasizing the need for robust regulations to safeguard consumers and markets.
