Circle CEO Jeremy Allaire noted that the new stablecoin bill could be pivotal to the future of the US dollar, according to a tweet dated April 15.
The US House Financial Services Committee published a draft of it Stablecoin bill On April 15th. The bill makes sweeping recommendations such as proposing a moratorium on algorithmic stablecoins and making the Federal Reserve regulate stablecoins by non-bank entities.
Besides, the bill also discusses central bank digital currencies (CBDC) and recommends further research on digital dollars.
Key provisions of the Stablecoin Bill
The bill allows non-banking entities to register and clearly spells out the factors regulators must consider in order to grant these companies a license to operate. According to the bill, companies that fail to register with the authorities could be subject to a $1 million fine or five years in prison.
It also focuses on fraud prevention and handles the cancellation of stablecoins. The bill explicitly prohibits restructuring and mixing of funds. It also makes strict provisions for the disclosure and proof of stablecoin issuers, while they must establish a direct redemption process.
Additionally, the bill proposed a two-year moratorium on the creation, creation, and issuance of internally secured stablecoins that do not already exist. It directs regulators to research this type of stablecoin and publish a report within a year of enactment of the law.
These rulings are not surprising, given that the bill was drafted against the collapse of the algorithmic stablecoin Terra UST in 2022.
Meanwhile, a public hearing on the subject is scheduled for April 19 — the day after SEC Chairman Gary Gensler appears before the committee. Several stakeholders, such as Chief Strategy Officer Dante Disparte, will testify at the hearing.
Circle CEO Jeremy Allaire He said The bill comes at a critical time for the US dollar. Allaire noted that competition for currencies is heating up, adding that the United States needs to strengthen careful regulation. He said:
“It is clear that there is a need for deep, bipartisan support for laws that ensure that digital dollars are issued online, supported, and safely operated.”
Meanwhile, Allaire noted that BIll has many open and challenging issues that need to be addressed by stakeholders.
The dominance of the US dollar has come under increasing threat in the wake of recent events in the world. Balaji Srinivasan, former CTO of Coinbase, echoed these concerns when he said that the dollar is no longer too big to fail.
Adhering to the Trust Project’s guidelines, BeInCrypto is committed to providing unbiased and transparent reporting. This news article aims to provide accurate and timely information. However, readers are advised to independently check the facts and consult with a professional before making any decisions based on this content.