Yes, we are talking about the United States Stablecoin Bill. It’s a plan that will gradually regulate the stablecoin peg with U.S. dollar reserves via central bank-issued CDBCs. The aim is to end the current fiat domination financial system, creating a diverse nationwide banking system with centralized clearing and settlement centers. The Stablecoin Bill will implement these changes along with regulations to restrict the assets that can go back to the stablecoin reserve and help the cryptocurrency to work more efficiently with digital currencies like bitcoin and Ethereum.
What is a Stablecoin?
Stablecoins are digital assets that have been developed to meet certain requirements. They’re created by distributed, distributed ledger technology (DLT) systems, and used as a digital currency. The goal of the stablecoin is to avoid market fluctuation and to create a stable peg of currency such as US dollar. It is an intermediate digital currency that inter-connect the digital currency to fiat currency. It is a private reserve that can compete with the Federal Reserve and has more flexible monetary policies to help the economy weather the uncertainty of the financial crisis.
How Does the Stablecoin Bill Work?
The detail of the Bill yet needs to prevail. However, the sign of government collaboration is a great way to help cryptocurrency transit into a more institutional setup. The goal is not to prohibit the usage of the stablecoin but rather to avoid abusing the use to harm society. To prevent rug pulls, scams, bankruptcy without protections, and founders running away, the Bill hopes to bring the community together on the right track.