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25 January 2021

New Draft U.S. Law Will Make It Illegal To Issue Stablecoins Without Federal Reserve Approval | Regulation Bitcoin News

New Draft U.S. Law Will Make It Illegal To Issue Stablecoins Without Federal Reserve Approval | Regulation Bitcoin News


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Law Will Make It Illegal To Issue Stablecoins Without Federal Reserve Approval.

lawmakers have introduced a bill that will force private stablecoin issuers to obtain a banking charter (or license) and approval from the Federal Reserve before they can issue a stablecoin.

Jesús García and Stephen Lynch – all of them Democrats – the proposed law will also require issuers to get prior approval from the Federal Deposit Insurance Corporation (FDIC) and other bank regulators.

It will demand that any stablecoin issuers obtain FDIC insurance or “otherwise maintain reserves at the Federal Reserve to ensure that all stablecoins can be readily converted into United States dollars, on demand.”.

Tlaib argues that the planned law “would protect consumers from the risks posed by emerging digital payment instruments, such as Facebook’s Libra and other stablecoins currently offered in the market, by regulating their issuance and related commercial activities.”.

The bill effectively puts private stablecoin issuers under the direct supervision of the Federal Reserve.

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