Stablecoins might finally get some stability — at least in the eyes of the US government — thanks to legislation that would make stablecoin insurance possible.
BREAKING: US Rep. Josh Gottheimer has released draft text of a bill that would set up a new regulatory structure for certain stablecoins, including government-backed insurance akin to what's in place for bank deposits.#bitcoin
— Neil Jacobs (@NeilJacobs) February 15, 2022
According to a report, Democratic representative Joshua S. Gottheimer introduced a bill that calls for government backed insurance for stablecoins. The insurance is expected to be akin to what we see with bank deposits.
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- As of now, which stablecoins have not been specified. “The New Jersey Democrat’s bill would create a “qualified” stablecoin designation — what he describes as a kind of “seal of approval” for consumers,” Politico said.
- In order to qualify, they would need to be issued by a bank or non-bank, as long they meet OCC (Office of the Comptroller of the Currency) and reserve requirements.
- Also according to the report, Gottheimer expects some movement on stablecoin regulation in the coming months.
- Providing insurance for a stablecoin would alleviate essentially any and all stablecoin FUD. Even though stablecoins like Circle are mostly backed by dollars or short term commercial paper (which earns interest i.e. makes the reservers more plentiful), they still fall under scrutiny because they don’t operate with the same safety net that banks do when they lend out your money.
- Circle, the company behind USDC, would appear to be in the driver’s seat because of its history of compliance with the US government. PAX also has a similar history of compliance. USDT might have some issues complying…
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