The newly introduced bill in the United States Congress highlights its preparedness to take measures against potential risks related to unregistered transactions and stablecoins. The legislation specifies the requirements for those who issue stablecoins and the sanctions that will be applied to those who cannot meet these requirements.
What is stablecoin?
Stablecoins are cryptocurrencies that offer price stability by being backed by specific assets or by using algorithms to adjust their supply based on demand. Essentially, stablecoins emerged in 2014 as a solution to the fluctuating prices of cryptocurrencies, with BitUSD being one of the first examples. Many stablecoins are backed by traditional currencies such as the US dollar or euro to maintain their price stability. The popularity of stablecoins has continued to rapidly increase in recent years.
What’s in the bill?
The purpose of the stablecoin bill presented in the United States Congress is to take measures against the unregistered activities and potential risks of these cryptocurrencies. The bill imposes certain obligations on stablecoin issuers and punishes those who do not comply with these obligations.
According to the bill, stablecoin issuers will be required to register with the Financial Crimes Enforcement Network (FinCEN), a unit operating in the United States. Those who do not register will face up to five years in prison and a fine of $1 million.
The bill stipulates that non-bank stablecoin issuers will be subject to Federal Reserve oversight. This will enable non-bank entities to operate in a more transparent and reliable manner in the market. Insured depository institutions will be able to issue stablecoins subject to appropriate oversight.
Officials have expressed concerns about the price stability and impact of stablecoins on the financial system. Therefore, it is emphasized that stablecoins need to be more regulated and supervised.
If the bill is enacted, the US will become a leading country in the regulation of stablecoins, and it is expected that other countries will take similar steps in this regard.