US Senators Lummis and Gillibrand Introduce New Bill Addressing Stablecoin Regulation

US Senators Lummis and Gillibrand Introduce New Bill Addressing Stablecoin Regulation

US Senators Lummis and Gillibrand Introduce New Bill Addressing Stablecoin Regulation

A new bill has been introduced that imposes a billion limit on non-depository fiduciary institutions to issue payment stablecoins. Once the issuer exceeds this limit, they must be “a depository institution that has been authorized as a national issuer of payment stablecoin,” according to the bill. Currently, the largest US-based stablecoin issuer, Circle (with billion in USDC outstanding), is not a fiduciary depository institution. The second largest, Paxos, has a limited-purpose trust charter through the New York Department of Financial Services, although its market capitalization falls well below the billion limit. A Senate official described the billion limit as the approximate threshold between a small community bank and a larger regional financial institution with potential systemic risk.