Clarity? US Draft Bill Proposes Regulation of Stablecoins in Crypto Market
By: Shawn Chambers
Congress in the United States will debate a bill which will set requirements for issuers of stablecoin payments and will conduct research about the digital dollar.
United States Congress will soon issue new guidelines on stablecoins. Terra Luna UST collapsed in one of the worst crypto calamities. In total, the US government has issued guidelines that discourage algorithms-based stablecoins such as DJED.
Denelle D. Dixon, the CEO of Stellar Development Foundation and executive director of the Stellar Development Foundation said in an interview with Bloomberg late last year that there was no other choice for the United States than to regulate stablecoins by the end of the current calendar year. Lack of a digital assets regulatory framework may also cause the United States to lose their competitive edge as both a technological and financial center.
US Congress on Stablecoins
Congress of the United States is set to discuss legislation that would require stablecoin payments issuers to meet certain requirements and research the digital currency. House Financial Services Committee released a brand new bill putting the United States Dollar in the forefront of the stablecoin industry. Financial regulators including the National Credit Union Administration, Federal Deposit Insurance Corp. and Office of the Comptroller of the Currency will have the authority of approving stablecoins.
Anyone who fails to register stablecoins at the relevant financial regulatory body will face a $1,000,000 fine. In addition to a five-year jail sentence, the newly proposed Congress Bill also includes a two-year ban of algorithmic stabilitycoins.
This bill says that stablecoin payments are not covered by the Federal Deposit Insurance Corporation of the United States.
According to the bill "Payment Stablecoins have neither the support of the United States Government, nor Federal Deposit Insurance Corporation." " They also are not covered by insurance offered by the National Credit Union Administration. "
Along with FedNow's launch, the bill instructs the Fed on the feasibility of creating digital currency.
In the bill , notes that payment stablecoins "are not backed or guaranteed by United States Government. Deposits of these coins are also not insured by Federal Deposit Insurance Corporation. Shares in credit unions cannot be covered by National Credit Union Administration."
In addition, it directs FedNow to conduct a feasibility study on a digital currency.