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Clarity for Payment Stablecoins Act of 2023
5/24/2024, 1:38 PM
Summary of Bill HR 4766
The main goal of the bill is to ensure that stablecoin issuers are transparent about their reserves and operations, in order to protect consumers and maintain financial stability. The bill requires stablecoin issuers to obtain a license from the Federal Reserve and adhere to certain reporting and disclosure requirements.
Additionally, the bill establishes a framework for the regulation of stablecoin issuers, including requirements for capital reserves, audits, and compliance with anti-money laundering and counter-terrorism financing laws. The bill also empowers the Federal Reserve to take enforcement actions against stablecoin issuers that fail to comply with the regulations. Overall, the Clarity for Payment Stablecoins Act of 2023 seeks to bring clarity and accountability to the growing stablecoin industry, in order to protect consumers and maintain the stability of the financial system.
Congressional Summary of HR 4766
Clarity for Payment Stablecoins Act of 2023
This bill establishes a regulatory framework for payment stablecoins (digital assets which an issuer must redeem for a fixed monetary value).
Only permitted issuers are allowed to issue a payment stablecoin for use by U.S. persons. Permitted issuers must be a subsidiary of an insured depository institution, a federal-qualified nonbank payment stablecoin issuer, or a state-qualified payment stablecoin issuer. In general, permitted issuers must be regulated by the appropriate federal regulator, however, state-qualified issuers must be regulated by an appropriate state regulator.
Permitted issuers must maintain reserves backing the stablecoin on a one-to-one basis using assets as outlined by the bill, such as U.S. coins and currency or other assets regulators determine appropriate. Permitted issuers must also publicly disclose their redemption policy, establish redemption procedures, and publish on their website every month the details of the issuer's reserves.
The bill sets forth requirements for (1) the rehypothecation, or reusing, of such reserves; (2) providing custodial or safekeeping services for stablecoins or private keys; and (3) supervisory, examination, and enforcement authority over non-state qualified issuers.
In addition, the bill places a two-year moratorium on new endogenously collateralized stablecoins (i.e., stablecoins that rely on the value of another digital asset created or maintained by the same originator to maintain the fixed price).
Under the bill, permitted payment stablecoins are not considered securities under securities law.
