#StablecoinLaw #StablecoinLaw The Stable Act and Genius Act are two major legislative proposals aimed at regulating stablecoins in the U.S. Here is a breakdown of key aspects:
📍Key provisions of the Stable Act:📍
Federal licensing📍: Stablecoin issuers are required to obtain federal licenses, ensuring compliance with strict regulations.
*Reserve requirements: Mandates 1:1 reserve backing for stablecoins, acceptable assets including cash, treasury bills, and highly liquid assets.
*Monthly reporting: Issuers must publish detailed reports on reserve holdings, outstanding stablecoin circulation, and redemption activities.
Federal preemption: Eliminates state licensing requirements for federally approved issuers, centralizing oversight.
*📍Key provisions of the Genius Act📍
-*Tiered regulatory approach*: Allows smaller issuers (<$10 billion market cap) to operate under state supervision, while larger issuers are subject to federal oversight.
- *Reserve requirements*: Similar to the STABLE Act, emphasizing transparency and monthly reserve certification.
- *AML and foreign issuer provisions*: Treats stablecoin issuers like financial institutions under the Bank Secrecy Act, requiring AML programs and restrictions screening.
- *Consumer protection*: Prohibits names or marketing that imply affiliation with the U.S. government, requires public fee disclosures, and mandates a clear redemption process ¹ ² ³.
🙆Impact on stablecoin issuers:🙆
- Circle #USDC : Well positioned due to current compliance practices and reserve transparency.
-*Tether #USDT🔥🔥🔥 : Faces significant challenges due to offshore structure and reserve composition.
- *PayPal's #PYUSD : Potential to leverage the regulatory framework, considering its compliance-first approach.
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