TechFlow news — Three U.S. Congress members have drafted the "Stablecoin Network Sharing and Bank Licensing Enforcement Act," aiming to protect consumers from risks posed by emerging digital payment tools by regulating stablecoin issuance and related commercial activities. The legislation covers Facebook-led Libra and other existing stablecoins in the market.
According to reports, the bill requires stablecoin issuers to obtain a banking license before issuing any stablecoin. Companies providing stablecoin services must comply with existing banking regulations within their jurisdiction. Any company or bank issuing stablecoins must report to the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and relevant banking regulators six months prior to issuance, obtain approval, and conduct ongoing analysis of potential systemic impacts and risks. Additionally, all stablecoin issuers must either secure FDIC insurance or maintain reserves at the Federal Reserve to ensure that every stablecoin can be converted into U.S. dollars on demand and at any time.
In response, Circle co-founder and CEO Jeremy Allaire tweeted today that this stablecoin legislation would represent a major setback for U.S. digital currency innovation, restricting the accelerated development of the blockchain and fintech industries.
