Draft U.S. Stablecoin Bill: Bringing Clarity to CBDCs & Stablecoins

• U.S. lawmakers have been circulating a draft of a stablecoin bill since last fall that is focused on Endogenously Collateralized Stablecoins and Qualified Payment Stablecoin Issuers.
• The bill proposes a moratorium on stablecoins backed by other cryptocurrencies, as well as a request to study a central bank digital currency (CBDC).
• CoinDesk Global Policy and Regulation Managing Editor Nikhilesh De breaks down the first possible major piece of crypto legislation that could move in 2023.

Overview: U.S. Draft Stablecoin Bill

The U.S. House Financial Services Committee has published a draft version of the potential landmark stablecoin bill, which is likely to be at the center of an election cycle issue due to its focus on central bank digital currencies (CBDCs) and Endogenously Collateralized Stablecoins (algorithmic stables) or ones backed by other cryptocurrencies such as bitcoin or ethereum.

Moratorium On Cryptocurrency-Backed Stablecoins

The proposed bill includes a moratorium on stablecoins that are backed by other cryptocurrencies, as well as a request for the Federal Reserve to study the feasibility of creating a CBDC for use in the United States. This would be in contrast to existing “fiat-backed” stablecoins like USDT, USDC, DAI and BasisUSD which are backed with reserves held in fiat currency such as US dollars or euros rather than another cryptocurrency asset like Bitcoin or Ethereum etc..

Breakdown Of Potential Landmark Crypto Legislation

CoinDesk Global Policy and Regulation Managing Editor Nikhilesh De breaks down what this proposed bill could mean for crypto legislation if it were passed into law in 2023. He explains that not only does this proposed legislation ask for an end to new issuances of cryptocurrency-backed stablecoins but also sets up regulatory infrastructure including registration requirements, capital reserve thresholds and reporting requirements among others things which would need to be met before any new stablecoin issuances were approved under this law if it was ever enacted..

Qualified Payment Stablecoin Issuers

The bill also introduces the idea of qualified payment stablecoin issuers, who will have additional obligations under these laws if they wish to be approved for issuing new tokens according to this proposal from Congress. These include requirements related to know your customer (KYC) rules, anti-money laundering regulations, privacy laws and more stringent capital reserve requirements among others things all aimed at protecting consumers from fraudulent activity associated with any potential new issuances under this law should it pass into effect..

Conclusion: An Eye On Central Bank Digital Currencies
Ultimately this proposed legislation is largely concerned with stabilizing the growing number of private sector issued cryptocurrencies while at the same time setting up regulatory parameters around how these assets can be properly managed within existing legal frameworks – all while keeping an eye towards introducing central bank digital currencies into circulation should they become feasible over time in order to allow consumers greater access and trust into using them instead of regular fiat money whenever appropriate..