Sen. Bill Hagerty (R-Tenn.) recently introduced a new bill called the Payment Clarity Stablecoins Act of 2024. The bill aims to create clear rules for stablecoins, a type of digital currency designed to maintain a stable value. to traditional money like US dollars.
This bill aims to clarify the management and issuance of stablecoins. By establishing clear rules, it aims to foster innovation in digital currencies while ensuring consumer protection.
Stablecoins are cryptocurrencies that maintain stable value by being tied to assets such as national currencies or goods, minimizing the volatility seen in other cryptocurrencies.
A key aspect of this bill is its approach to stablecoin issuers of various sizes. Companies issuing stablecoins worth less than $10 billion can be subject to state rather than federal regulations, making it easier for small businesses to enter the market without excessive federal oversight.
In contrast, companies issuing more than $10 billion in stablecoins will need approval to continue operating under state regulations.
A key part of the bill is to require stablecoin issuers to back their digital currencies 1:1 with real assets. This means that for every stablecoin issued, an equal amount of safe assets such as US dollars or Treasury bills must be held. To build trust, issuers must provide evidence of monthly reserves.
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The bill also emphasizes consumer protection by ensuring that issuers keep customer funds separate from their own funds. This prevents misuse of customer funds and strengthens market safety.
From a regulatory perspective, the bill designates specific roles for government agencies. The Federal Reserve will regulate banks that issue stablecoins, while the Office of the Comptroller of the Currency (OCC) will oversee non-bank issuers. This framework aims to establish a balanced regulatory system for stablecoins.
Sen. Hagerty believes this bill will not only support the growth of stablecoins, but also increase demand for U.S. Treasuries and address national fiscal challenges. He emphasizes that clear regulation is essential for Americans to realize the full potential of stablecoins.
