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US House of Rep Attempts to Develop Draft Bill Unofficially

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The United States House of Rep members are making another attempt to develop an extensive regulatory structure for stablecoins such as Tether and USDC.

The US Congress is taking another crack at introducing a new draft bill that focuses on offering requirements that can pay stablecoin issuers as well as research on the digital dollar.

On Saturday, April 15, the United States House Financial Services Committee opened a new discussion without an official notice. The hearing is anticipated to be on Wednesday, April 19 by the committee’s latest panel whose objective is a financial technology and digital assets.

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Major Focus of the Draft Bill

The US Congress plans to ensure the accuracy of the digital assets that are within the stablecoin market. Moreover, the ever-increasing stablecoins sector passed through one of the worst cryptocurrency catastrophes. That is, at the time of the Terra Luna UST collapse when over $40 billion was siphoned out of the industry.

Thus; the US Federal Government introduced various standards against algorithmic stablecoins that are like the Cardano-based DJED. In a Bloomberg interview in the latter part of last week, Denelle Dixon, the Executive Director, and CEO of Stellar Development Foundation shared an opinion.

According to her, the United States government has no alternative than to regulate the stablecoins sector by this coming year’s end.

She further added that the US is exposing itself to the risk of losing the edge it has over financial and the technology hub because of no regulatory framework for digital assets.

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United States View on Stablecoins

The US Congress is ready to speak on a new draft bill that is aimed at delivering the requirements needed to pay stablecoin issuers. They also plan to research a digital dollar.

Due to this latest bill, introduced by the House Financial Services Committee, the US dollar becomes the focal point for stablecoin development.

In addition, the issuers of the stablecoin are expected to obtain regulatory approvals from the appropriate financial regulators. This includes; the Federal Deposit Insurance Corp., National Credit Union Administration, or Office of the Currency Comptroller.

Any failure to identify with the appropriate financial regulatory agencies on stablecoin issuance attracts a fine of over $1 million of a jail term of 5 years.

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Fortunately, the new draft bill by Congress covers a 2-year ban on algorithmic stablecoins. The bill revealed that stablecoin payments are not insured by the US federal deposits insurance corporation.

This means that payment stablecoins aren’t supported by credit and full faith of the US, guaranteed by the US government, and subject to deposit insurance by the FDIC (Federal Deposits Insurance Corporation) or subject to share insurance by the NCUA (National Credit Union Administration) according to the bill.

At present, the bill intends to make the Fed study the usefulness of a digital dollar during the launch of FedNow.

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