U.S. Draft Bill to Place Stablecoin Issuers Under Fed Oversight

• A new draft bill seeks to provide a stablecoin framework in the United States, which would place private issuers such as Circle and Tether Holding under Federal Reserve oversight.
• The draft bill directs all USD-related stablecoin issuers out of the United States to seek registration before proceeding with their operations in the country.
• Insured financial institutions seeking to issue stablecoins will fall under necessary Federal banking agency supervision as spelled out in the Federal Deposit Insurance Act.

Draft Bill for US Stablecoin Framework

A new draft bill has been published from the House of Representatives’ document repository that provides a stablecoin framework in the United States. This framework would see private issuers such as Circle, the issuer of USDC, and Tether Holding, the firm behind USDT, placed under the Federal Reserve (Fed) oversight.

Regulation Requirements

The bill directs all USD-related stablecoin issuers out of the United States to seek registration before proceeding with their operations in the country. Meanwhile, insured financial institutions seeking to issue stablecoins will fall under necessary Federal banking agency supervision as spelled out in the Federal Deposit Insurance Act.

Considerations on April 19th

On April 19th policymakers are scheduled to discuss this bill and look to approve some of its requests. These considerations include looking at technical capacity of an issuer and whether their proposal promotes inclusion and is innovative.

Reserves Backing Stablecoin

When it comes to reserves backing a stablecoin, requests from applicants include whether they can maintain its reserve in USD or other federal reserve assets.

Penalties for Non-Compliance

The bill states that any non-banking institution that fails to register may be subject to fines up to $1 million or prison sentences up to five years or both.