On the eve of the House of Representatives member Trey Hollingsworth and Senator Bill Hagerty presented a document designed to make stabelcoins secured by a combination of U.S. dollars and “government securities with a maturity of less than 12 months”, that is bonds. It would also legally force stabelcoin issuers like Circle with USDC and Tether with USDT to publish regular reports on their reserves.
Stablecoins are crypto-assets backed 1:1 to fiat currency, most often to the U.S. dollar. The idea is that for every Stablecoin in circulation, there is a $1 bill or other equivalent asset. If someone wants to redeem that coin, they can get real currency in return.
Earlier, Tether became a party to a major scandal: The New York Attorney General’s office accused the company that its reserves allegedly don’t fully back up all the USDT in circulation. And it’s true – some of Tether’s reserves consist of debt, not currency.
Coinbase collaborator Circle is the second-largest issuer of stabelcoin after USDT in terms of market capitalization – we’re talking about USDC. Last year, it was criticized for the fact that only 61 percent of its holdings were backed by cash or cash equivalents as of July.
Overall, the bill proposed by U.S. policymakers could significantly complicate business for the aforementioned cryptocurrencies. However, the document is still under development and the exact date of its consideration is still unknown.