New U.S. bill seeks to tighten measures for stablecoins

3 min readDec 3, 2020


The entire world is laying eyes on stablecoins because they’re a fast and easy way of financial inclusion, less risky than regular cryptocurrencies. U.S. regulators can’t let go this over their heads, so they’ve already prepared a new bill to tighten the legal measures for the stablecoins issuers.

According to the press release, the U.S. Congress reps Rashida Tlaib and Jesús García, along with the Chairman of Task Force on Financial Technology, Stephen Lynch, introduced the new “Stablecoin Tethering and Bank Licensing Enforcement (STABLE) Act” for consideration.

This bill for stablecoins is especially aimed to protect the consumers. Meanwhile, the issuers of such coins would need to comply with more obligations within U.S. jurisdiction.

Among the requisites, the potential issuers should get a banking charter and comply with the existing banking regulations. They also should obtain approval from the Federal Reserve (Fed) and the Federal Deposit Insurance Corporation (FDIC), and get FDIC insurance or maintain reserves at the Fed to ensure a fast withdrawal to USD.

The lawmakers showed special concern regards the future stablecoin developed by Facebook. Previously known as Libra, it was recently renamed Diem for its launch next year. Indeed, this bill is aimed to regulate specifically coins like this. Public Money Action Director Raúl Carrillo commented about it.

“By extending federal banking regulation and consumer protections to cover new forms of ‘deposits’, the STABLE Act addresses the growth of ‘shadow payments’ and ‘shadow banking’-forms of financial activity (…) Even more importantly, the STABLE Act shuts the door on Big Tech companies like Facebook that are trying to enter the banking space without following the appropriate rules or conducting business on a level playing field.”

Regulation vs innovation on stablecoins

In September, the U.S. Office of the Comptroller of the Currency (OCC) published guidance about stablecoins. At the time, the Office assured that it’d be legal for the banks to provide their services to the issuers. Likewise, OCC stated that national banks can’t deny their services to legal (but disfavored) businesses, like the crypto-companies.

The new bill comes out then like a kind of surprise, and it’s not considered fair by everyone. Kristin Smith, Executive Director in the U.S. Blockchain Association, declared:

“While we have had sustained and constructive discussions with Rep. Tlaib’s office on this issue, we disagree with the perspective of this legislation and oppose this bill. It would strengthen the position of the most powerful financial institutions, while overlooking two core promises of decentralized networks: the chance to put more power in the hands of individual consumers and to catalyze innovation across payments and other financial services.”

The STABLE Act will be commented on and amended if necessary during the next three months. Meanwhile, the stablecoin market continues its growth. According to CoinGecko, it’s surpassed the $25,5B mark and keeps upwards.

Featured Image by Steve Buissinne / Pixabay

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Originally published at on December 3, 2020.




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