The global digital assets industry is looking for regulatory clarity from the biggest financial watchdogs. Two US senators have come forward to initiate a bipartisan bill that aims to regulate stablecoins. This bid had arrived at a time when the US Securities and Exchange Commission (SEC) had allegedly failed to provide proper rules linked to crypto asset trading.
New stablecoin bill introduced
Cynthia Lummis and Kirsten Gillibrand proposed legislation that seeks to protect consumers. However, it also looks to ensure the stability of the US dollar and to promote financial innovation in the payments sector.
As per the bill introduced, it mandates one-to-one reserves for stablecoins, while, it prohibits the issuance of algorithmic stablecoins. A key point in here states that it requires stablecoin issuers to comply with US anti-money laundering (AML) and sanctions rules. Now, this can prove to be a big hit for the regulators amid investigation money laundering cases.
It added that the bill has been made with technical assistance from the Federal Reserve, the Treasury Department, the Federal Deposit Insurance Corporation (FDIC), and regulators from New York and Wyoming.
The biggest stablecoin, USDT has managed to take its market cap to $108.7 billion amid all the struggles.
It is important to note that the bill looks to build a tool for FDIC custodians so that a resolution can come in case a stablecoin issuer becomes insolvent. It mentioned that the State trust companies are authorized to issue payment stablecoins up to $10 billion, while federal or state depository institutions can issue any amount.
Can it affect market?
An expert highlighted that the Federal Reserve can issue enforcement actions against stablecoin firms with assets holdings above $10 billion. A joint action with state authorities is required for firms below this amount.
The Senate bill comes in when Congress is pushed to pass stablecoin legislation. The House and Senate are looking to finalize such legislation by next month.
But the crucial action has also landed amid a much anticipated Bitcoin halving event. This had already added selling pressure on the crypto market. The cumulative crypto market cap recorded consecutive red indexes over the past several days. It now stands at around $2.29 trillion.
Bitcoin price is down by over 7% in the last 30 days. BTC is trading at an average price of $62,236, at the press time. Its 24 hour trading volume is down by 21% to stand at $36.2 billion.
