United States of America: Introduced Bill to provide for effective regulation of payment stablecoins, and for other purposes (SB 4155) including prohibition of services

On 17 April 2024, a Bill to provide for effective regulation of payment stablecoins, and for other purposes (SB 4155) including the prohibition of services was introduced into the United States Senate. All persons or businesses issuing stablecoins not authorised as a non-depository trust company not exceeding USD 10 billion or a depository institution would be considered in breach of the law. Reserves backing payment stablecoins cannot be rehypothecated or reused, except to create liquidity for stablecoin redemption, allowing them to be pledged as collateral in short-term repurchase agreements cleared by a central counterparty or approved by the Board and relevant banking supervisors. Finally, the sale of assets from a failed payment stablecoin issuer to individuals who engaged in misconduct leading to losses at the issuer are prohibited.