The United States Congress is set to discuss a new bill providing requirements for payment stablecoin issuers and research on a digital dollar.
United States Congress is preparing To release more clarity on digital assets in the stablecoin market. The ballooning stablecoin industry experienced one of the worst crypto disasters during the collapse of Terra Luna UST, after over $40 billion was wiped from the industry. As a result, the federal government of the United States has issued a number of guidelines against algorithmic stablecoins similar to the Cardano-based DJED.
During an interview with Bloomberg late last week, Danelle Dixon, CEO and Executive Director of the Stellar Development Foundation, said that the United States has no choice but to regulate the stablecoin industry by the end of this year. Furthermore, the United States risks losing its edge as a financial and technology hub due to the lack of a digital asset regulatory framework.
US Congress on Stablecoins
The United States Congress is set to discuss a new bill providing requirements for payment stablecoin issuers and research on a digital dollar. The new bill released by the House Financial Services Committee puts the United States dollar at center stage for stable currency development. In addition, issuers of stable coins are expected to obtain regulatory approval from relevant financial regulators, including the National Credit Union Administration, the Federal Deposit Insurance Corp., or the Office of the Comptroller of the Currency.
Failure to register with the relevant financial regulatory agencies on the issuance of the stablecoin will be punishable by a fine of not more than $1 million or up to five years in prison. Interestingly, the newly drafted congressional bill includes a two-year ban on algorithmic stable coins.
The bill notes that stablecoin payments are not covered by the United States Federal Deposit Insurance Corporation.
“Payment stable coins not backed by the full faith and credit of the United States of America, guaranteed by the United States government, subject to deposit insurance by the Federal Deposit Insurance Corporation, or subject to share insurance by the National Credit Union Administration,” the bill reads. noted,
Meanwhile, the bill intends to direct the Fed to study the feasibility of a digital dollar during the launch of FedNow.
side notes
Congress’s draft bill on stablecoins comes ahead of this week’s full Financial Services Committee meeting to hear from the Securities and Exchange Commission.seconds) Chairman Gary Gensler.
Additionally, a House Financial Services subcommittee will hold a hearing on stable coins on Wednesday, including Dante Disparte from Circle Internet Financial, Jake Chervinsky of the Blockchain Association, Columbia professor Austin Campbell, and New York Department of Financial Services Superintendent Adrienne Harris.
Another bitcoin ETP rejection. Commissioner Ueda and I disagree: https://t.co/fgUOHdN3NN
— Hester Peirce (@HesterPeirce) March 10, 2023
This comes after SEC commissioners were split on the way forward with the digital assets regulatory framework. For example, SEC Commissioner Hester Pierce has disagreed with Gensler on several instances. Bitcoin ETP.
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