Draft US stablecoin bill would ban algorithmic stablecoins

Draft US stablecoin bill would ban algorithmic stablecoins


A new draft legislation in the US House of Representatives would place a two-year ban on stablecoins that are depegged from the US dollar.

The bill’s definition would reportedly cover "endogenously collateralized stablecoins," which depend on the value of an attached cryptocurrency from the same creator for it to maintain a stable price.

The bill would also criminalize the creation or issuance of such stablecoins after a two-year grace period designed for existing providers to change their models and collateralize their offerings differently.

At the same time, non-bank issuers of stablecoins would be controlled by state banking regulators and the Fed. Banks and credit unions would also be able to issue their own stablecoins after the regulators' approval. Issuance without approval is punishable by up to five years in prison and a $1 million fine.

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