The Stablecoin Tethering and Banking Licensing Enforcement (STABLE) Act has been proposed by three U.S. congressional representatives. This act intends to regulate stablecoin issuers by requiring them to obtain bank charters and place reserve funds with the Federal Reserve. By placing reserve funds in the Federal Reserve, they will undergo regular audits to ensure compliance with the intention to protect low-income consumers from unethical issuers of coins.
Presently, in the United States, organisations that issue stablecoins operate as trust companies or fiduciaries and agents. Stablecoin issuers are currently not required to obtain banking charters or place funds with the Federal Reserve.
Stablecoins do not have the volatile price change characteristic and offer a stable value compared to crypto trading and they are generally backed by things such as cryptocurrencies, gold, or fiat currencies. This bill could have crucial implications for permissionless blockchains, as any participant on a network that is running a software that validates stablecoin smart contract transactions may fall within the remit of violating the law, unless they are a chartered bank.
Opponents of this bill feel that it impedes innovation by creating burdensome regulations on stablecoins. As the market for cryptocurrency grows, continuous efforts to regulate stabelcoins is expected.