Lawmakers Unveil STABLE Act to Overhaul Stablecoin Rules in U.S
- STABLE Act empowers OCC to regulate nonbank stablecoin issuers.
- Tether may face delisting if it fails to meet new compliance standards.
- GENIUS Act sets stricter audit requirements for large stablecoin issuers.
U.S. lawmakers aim to regulate the rapidly growing stablecoin market. The proposed STABLE and GENIUS Acts set strict compliance rules, with major implications for companies like Tether.
STABLE Act To Streamline Stablecoin Market
House lawmakers introduced a new proposal to regulate stablecoins which focuses on clearer oversight and compliance requirements. The bill, titled the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act, seeks to create a consistent framework for U.S. stablecoin issuers.
The STABLE Act outlines provisions to authorize the Office of the Comptroller of the Currency (OCC) to oversee federal qualified nonbank stablecoin issuers. Unlike previous drafts, the bill empowers the OCC rather than the Federal Reserve. Lawmakers aim to streamline regulatory frameworks for stablecoin issuers to reduce uncertainty in the industry.
Meanwhile, the Senate introduced its own bill, the GENIUS Act, which has a few similarities with the STABLE Act. The GENIUS Act sets clear regulations for stable coin issuers that exceed $10 billion in market capitalization. The state-level regulation would apply for issuers below this threshold which offers flexibility to smaller entities.
Tether Faces Increased Scrutiny
These bills include stricter requirements for stable coin issuers, especially for large-scale players like Tether. Tether, the worlds largest stablecoin by market cap, could face major hurdles under the new bills. Lawmakers have stressed that companies like Tether must comply with regulations or cease issuance in the U.S.
Although Tether provides quarterly reports on its reserves, it has faced scrutiny for not maintaining full audits. Lawmakers argue that companies must meet high standards such as a full audit by a U.S-based firm, to ensure compliance. Critics argue that Tethers lack of an audit could become a barrier to its operations in the U.S. if the bill becomes law.
Delisting Features on Bills
The STABLE and GENIUS Acts also address possible delisting of stablecoins on major exchanges like Coinbase and Kraken. Even though none of the bills mandate delisting, exchanges may decide to reduce exposure to non-compliant coins. Industry observers predict that non-compliant tokens may face stricter scrutiny over their use in the U.S. market.
However, exchanges are likely to assess risk and decide whether to support Tether. They may restrict access to USDT for U.S. customers thus reducing exposure. However, these decisions will depend on future regulatory developments and the stability of the broader stable coin market.
The introduction of these bills marks a major step in the U.S. governments effort to regulate the industry. Lawmakers across both chambers of Congress are expected to collaborate to finalize the legislation. Although the bills may take months to pass and become law, there is no grace period for issuers to meet new compliance standards.
Read more: https://www.tronweekly.com/lawmakers-propose-new-bill-for-stablecoin/
Text source: TronWeekly
