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It furthermore dictates a series of limitations that outlaw stablecoin issuance for any entity that is not “an insured depository institution that is a member of the Federal Reserve System,”.

The bill’s requirements, Davidson reasoned, would ensure that only major banks would be able to use stablecoin technologies in the U.S.

Regarding the specific threats of the bill, Peter Van Valkenburgh of non-profit advocacy group Coin Center noted, this would threaten operators of nodes of decentralized networks like Ethereum, on which many stablecoins operate.

“I would hope that the process would be able to stop it.”

It refers specifically to Facebook’s soon-to-launch Diem, formerly known as Libra, a stablecoin that has been a particular lightning rod for symbolic legislation that goes nowhere