The U.S. government is planning a radical move in the digital currency space. According to congressional sources, lawmakers are discussing a proposal that would allow the creation of federal stablecoins – dollar-backed digital currencies directly regulated by the Federal Reserve. This move could be a game-changer for the entire crypto market.

Why Stablecoins and Why Now?

Stablecoins are cryptocurrencies pegged to fiat currencies – such as the U.S. dollar – and serve as a bridge between traditional finance and crypto. Their popularity is soaring thanks to their low volatility and fast transaction speed. That’s why they’ve come under the radar of American lawmakers.

Donald Trump has stated that the U.S. "must not allow the future of the dollar to be controlled by anyone other than the U.S. government." Since stablecoins are currently issued by private companies (e.g., Circle, Tether), the White House is pushing for stricter regulation and the introduction of government-backed alternatives.

What Does the Bill Say?

The draft bill circulating among both Republicans and Democrats includes:

🔹 Creating a framework allowing only licensed banking institutions to issue stablecoins

🔹 Authorizing government-issued stablecoins fully backed and monitored by the Federal Reserve

🔹 Banning anonymous and unregulated stablecoins within the U.S. economy

🔹 Mandating regular Fed oversight of reserves backing each stablecoin

According to experts, the new system could eventually replace some current private stablecoins like USDT or USDC – and offer a more secure, government-controlled digital dollar.

Market and Community Reaction

While some investors welcome the proposal as a step toward greater trust and adoption of digital assets, others fear it could erode the decentralized nature of crypto.

Jeremy Allaire, CEO of Circle, stated: "The government has the right to protect its monetary system. But if it becomes a monopoly, it will stifle innovation."

Meanwhile, SEC Chair Gary Gensler said: "Digital currencies must serve citizens, not speculators."

What Does This Mean for Crypto?

Stablecoin regulation could affect exchange trading, the DeFi sector, and cross-border payments.

On the other hand, the creation of a federal stablecoin may boost institutional confidence and attract new investors.

This move is also seen as an attempt by the U.S. to stay ahead of China, which is already piloting its digital yuan – and preserve the dollar’s global dominance.

#Stablecoins , #crypto , #Regulation , #FederalReserve , #defi

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