Banks could flood into stablecoins if new bill passes: S&P Global

Global ratings agency S&P Global Ratings says a new stablecoin-focused bill introduced in the U.S. Senate could “encourage” U.S. banks to enter the stablecoin market. He said there is.

According to a survey on April 23rd NoteS&P said the proposals outlined in the Payments Stablecoins Act, introduced in the Senate on April 17, would encourage banks to engage in the issuance of stablecoins pegged to the U.S. dollar and would He shared that it could cause problems for major non-US companies that issue tablecoins.

The rating agency described stablecoins as a potential “important pillar of financial markets” and cited them as evidence of their “enhanced efficiency and payment security” in the tokenization of assets and digital bonds. We focused on BlackRock’s recently launched BUIDL fund.

Of particular note is the Lummis-Gillibrand Payment Stablecoin Act Proposes to introduce $10 billion issuance limit For non-bank stablecoin companies, ban “unbacked” algorithmic stablecoins and require stablecoin issuers to hold 1:1 cash or cash equivalent reserves. It is mandatory.

“Assuming the bill is approved and relevant banking regulations follow, the new rules will give banks a competitive advantage by limiting the issuance of financial institutions without a banking license to a maximum of $10 billion. There is a possibility.”

The rating agency also noted that the introduction of a $10 billion issuance to non-bank companies could cause problems for Tether, which is currently the largest dollar-pegged stablecoin issuer on the market with a market capitalization of $110 billion.

Related: Cryptocurrency advocacy group claims stablecoin bill ‘infringes on freedom of speech’

“Tether, the largest stablecoin by outstanding amount, is issued by a non-U.S. entity and is therefore not a stablecoin that would be permitted to make payments under the proposed bill,” S&P Global said.

“This means that U.S. companies could not hold or trade Tether, potentially reducing demand while increasing U.S.-issued stablecoins.”

S&P noted that much of Tether’s trading activity occurred primarily outside the United States and was primarily driven by trading in emerging markets, retail activity, and remittances.

sauce: Senator Kirsten Gillibrand

When Democratic Sen. Kirsten Gillibrand introduced the bill last week, she said passing a stablecoin regulatory framework would “maintain the supremacy of the U.S. dollar, foster responsible innovation, protect consumers, and protect money.” “This is absolutely critical in cracking down on laundering and illicit finance.”

However, not everyone was satisfied with the proposals outlined in the bill.

Virtual currency advocacy group Coin Center he expressed concern about the billsaid banning algorithmic stablecoins is “bad policy” and called it an unconstitutional act under First Amendment protections.

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