Regulation of Payment Stablecoins: New Safety and Financial Oversight Rules
This Act establishes a comprehensive regulatory framework for payment stablecoins, digital assets pegged to a national currency, aiming to enhance financial safety and consumer protection. Citizens will gain greater confidence in the stability of these digital monies, as issuers must maintain 1:1 reserves and be subject to strict federal oversight. A moratorium on high-risk stablecoins is also introduced to protect users from volatile assets.
Key points
1:1 Reserve Requirement: Payment stablecoin issuers must maintain full reserves (e.g., in cash, insured deposits, short-term Treasury bills) to ensure immediate redemption for a fixed monetary value.
Federal Oversight and Licensing: A system for licensing and supervising issuers (banks and non-bank entities) by primary federal regulators (e.g., Fed, FDIC) is established, increasing market safety and transparency.
Customer Asset Segregation: Issuers must separate customer assets (stablecoins, private keys, cash) from the issuer's own funds, protecting customer money in case of company failure.
Activity Limitation: Permitted issuers are restricted to issuing, redeeming, managing reserves, and providing custody services for stablecoins, limiting engagement in riskier financial activities.
Moratorium on Endogenously Collateralized Stablecoins: A 2-year ban on issuing new stablecoins that rely solely on the value of another digital asset created by the same originator, mitigating systemic risk.
Regulatory Clarity: Payment stablecoins issued by permitted entities are explicitly excluded from the definition of a security, providing clear regulatory boundaries for their use as a means of payment.
Expired
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