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- An unknown source reported to Blockworks that a bill concerning stablecoins regulation within the territory of the U.S could be introduced by the end of the month. In February, an early draft of the bill was created by a U.S representative, Josh Gottheimer.
- There are similarities between the President’s Working Group on Financial Markets (PWG) and the upcoming bill. The Working Group proposed that the stablecoin issuers should be regulated by the Federal Deposit Insurance Corporation (FDIC).
- At present, anyone can issue stablecoins without the regulatory oversight from the U.S. However, stablecoin issuers such as Tether have faced the heat from regulators. The USDT stablecoin issuer was fined by CBDC in February 2019.
As per the Blockworks’ reports, a bill regulating stablecoins within the U.S could be introduced as early as this month.
The Upcoming Bill Can Be Introduced By This Month
In February, Josh Gottheimer, a U.S representative, drafted an early document of the bill. The draft contained a “qualified” definition that will be implied on stablecoins issued by banks and other institutions.
There is a contrasting similarity between the soon-to-be-released bill and a President’s Working Group on Financial Markets (PWG) report. Among many other suggestions, that workgroup has proposed that the Federal Deposit Insurance Corporation (FDIC) should regulate the stable coin issuers, similar to how banks are regulated.
There are, however, some disagreements over the guidance mentioned in the bill; it is being assumed that the content of the bill is generally concerned with stablecoin reserves.
Bill Will Prevent Stablecoin Issuers To Stuck In Situation Like Tether
As of now, any group or institution can issue stablecoins with almost negligible regulatory oversight from the U.S.
Tether, the issuer of the USDT stablecoin, has faced the brutal scrutiny of the regulators. The CFTC fined Tether for misrepresenting its reserve in October 2021. Tether, along with Bitfinex, its sister company, became the target of the New York Attorney General’s office on the charge that they allegedly concealed missing funds.
Blockchain Association’s Ron Hammond that the target of the upcoming bill is to avoid a situation like Tether’s. This is to be done audits by clarifying the assets that can be used in stablecoin reserves and by requiring stablecoins issuers.
In January, the Federal Reserve generated a CBDC report. The bill could also act as the starting point for the development of a central bank digital currency (CBDC) in the U.S. government.