US will have bank-like regulations for stablecoins

One of the reasons for the decline in the crypto market over the past few months are the apprehensions about stablecoins. Issuers of stablecoins in the US will face bank-like regulations and oversight. A draft bill related to this is being prepared. Senior Democrats and Republicans on the Financial Services Committee are finalizing the draft.

As Reuters reports, the bill would include standards such as capital, liquidity and banks for monitoring. This will allow firms outside the banking segment to introduce stablecoins. However, these firms will be barred from launching their own stablecoins. There are doubts over the passage of this bill in Congress. However, there is indication of its passage due to the support of senior members of both the parties. A source with knowledge of the matter said that the Senate has not been included in the talks for this. Mid-term elections are due in the US in November.

Stablecoins are cryptocurrencies that attempt to link their market price to a reserve asset such as gold or common currencies. These are more commonly used for digital transactions that involve converting virtual assets into real assets. USD Coin, Tether and Binance USD are some of the popular stablecoins, which are pegged to the US dollar. Stablecoin, a rapidly growing version of crypto, has emerged as a major medium of exchange. It is often used by traders to remit funds.

It is easy to exchange major stablecoins for bitcoin or other cryptocurrencies. Investors were hit hard by the recent fall in stablecoins. The UK Finance Ministry has decided to put in place a plan to deal with the downside in large stablecoins such as TerraUSD. Tether will launch a stablecoin pegged to the UK currency pound next month. The symbol for this altcoin will be GBPT. It will initially be based on the Ethereum blockchain. Support for other blockchain networks can also be added to this later. Recently Tether expanded the crypto market in Latin America with a new stablecoin. This stablecoin is tied to the Peso of Mexico. It will initially be supported on Ethereum, Tron and Polygon.

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