Important Step in U.S. Stablecoin Regulation: New Bill Signing Sparks Industry Debate

On July 19, the President of the United States officially signed the highly anticipated stablecoin regulation bill, which is the first cryptocurrency-related bill in the U.S. to become law, marking an important step forward in the regulation of stablecoins in the United States.

The bill establishes the first federal-level stablecoin regulatory framework in the United States. Notably, certain conflict of interest provisions that previously sparked controversy did not appear in the final version.

Legal experts have pointed out that this new bill provides an incentive for stablecoin issuance institutions to apply for banking licenses. The passage of the bill not only brings new development opportunities to the U.S. crypto industry but also sparks widespread discussion in the industry about the future issuance of stablecoins and the competitive landscape of the market.

The bill has been officially signed into law, and executives from several crypto companies attended the ceremony.

Regulation of stablecoins has always been one of the important issues faced by the cryptocurrency industry. This new bill serves as the first federal regulatory framework for stablecoins in U.S. history, providing a clearer regulatory direction for the U.S. market.

At the bill signing ceremony on July 18, the U.S. President stated: "This afternoon, we took a key step to solidify the United States' leadership in the global financial and cryptocurrency technology sectors. We will sign this landmark legislation into law."

Multiple founders and executives from leading companies in the cryptocurrency industry attended the signing ceremony, including the CEO of a well-known stablecoin issuance company and the CEO of a large cryptocurrency exchange platform.

A relevant official from the White House stated in a promotional video that the bill will update the outdated payment infrastructure with a revolutionary new payment system and will expand the dominance of the US dollar globally.

This bill establishes a federal regulatory framework for stablecoins, requiring that stablecoins must be fully backed by U.S. dollars or similar liquid assets, stipulating that issuers with a market capitalization exceeding $50 billion must undergo annual audits, and setting guidelines for foreign entities issuing stablecoins.

The bill will take effect 18 months after the president's signature, or 120 days after the primary federal payment stablecoin regulatory agency issues the final regulations of the implementation bill.

The dual licensing structure allows for interstate regulation, raising some concerns.

Before the bill was signed, many advocates in the cryptocurrency industry expressed support on social media. The founder of a payment company called it "one of the most transformative pieces of legislation in decades."

Some analyses suggest that the bill could promote stablecoins to mainstream status by enhancing trust in currency and encouraging market competition. Currently, the stablecoin market is mainly dominated by USDC and USDT, and the new bill may lead to more stablecoins entering the market, providing consumers with more choices.

However, the bill also faces some criticism. Some believe it could undermine the decentralized nature of cryptocurrencies and potentially lead to corruption. Some critics argue that the bill grants too much power to entities to issue new stablecoins, which could make the enforcement of regulatory standards more difficult.

In addition, experts have pointed out that this new bill will authorize relevant departments to regulate stablecoin issuers nationwide, but there may be potential conflicts of interest.

Some experts have expressed concerns about the dual licensing structure of the new legislation, believing it may lead to "low-standard competition" among different jurisdictions to attract crypto companies.

Bank licenses may become the target pursued by stablecoin issuers, the prospects of DeFi platforms remain unclear.

A cryptocurrency lawyer stated that the new bill provides incentives for stablecoin issuers to seek bank licenses. The stablecoin license established under the bill restricts the company's activities to "purely stablecoin issuance," but the business scope of most stablecoin issuers is not limited to this.

Even if issuers obtain a license approved by the bill, they still need to obtain a state-level money transmission license to operate nationwide. This provides an incentive for stablecoin issuers to apply for a national trust bank license.

An investment manager at a certain investment fund believes that many entities will strive to become stablecoin issuers. She pointed out that the benefits of issuers applying to establish banks could include the ability to pay interest on stablecoin deposit accounts, settle directly with the Federal Reserve, and have a broader range of business capabilities.

For some crypto users, the provision in the bill prohibiting stablecoin issuers from offering interest or returns to holders and users is controversial. There may be more legislation and regulation in the coming years to address the challenges in the DeFi space.

Regarding the exemption for foreign stablecoin issuers, any unapproved stablecoin will be prohibited from being offered in the United States within three years after the bill is signed. Foreign-issued stablecoins will also be prohibited unless the issuer can and is willing to comply with the legal requirements of the bill.

Overall, the signing of this bill marks a new phase in the regulation of stablecoins in the United States. Although it has sparked controversy in certain aspects, it may also provide new development opportunities for future stablecoin issuers. As the regulatory environment evolves, the industry will continue to pay attention to subsequent developments.