The US Congress has released a draft bill proposing a regulatory framework for stablecoins, a type of cryptocurrency that is backed by specific assets or algorithms to provide investors with price stability.
The bill puts the Federal Reserve in charge of non-bank stablecoin issuers, such as Tether and Circle, and requires them to maintain reserves backed by US dollars, Federal Reserve notes, and other approved assets.
Failure to register could result in imprisonment and fines of up to $1 million. Additionally, the bill includes a two-year ban on issuing stablecoins not backed by real assets and establishes a Treasury Department study on “endogenously collateralized stablecoins.” The proposal comes just before a hearing on stablecoins scheduled for April 19.
