The Stablecoin TRUST Act aims to bring stablecoins into the traditional U.S. financial system, but what does it really mean for the industry?
private stablecoins because they want to promote their own CBDC, but the U.S. is taking a different route that could spur significant innovation in the stablecoin industry — and, of course, make it more transparent and sustainable. But there are problems, with possibly serious consequences.The Stablecoin TRUST Act regulates what assets can back their USD-pegged stablecoins, which would be cash, where interest rates are incredibly low, and, where interest rates aren’t much better.
Competition may slow down in the stablecoin industry and we may see some consolidation. Since stablecoin issuers will not be able to use higher-paying assets to generate high interest, it will become difficult for them to make profit while managing compliance risk, HR taxes and general management costs.The big players will find a way to make it work, more than likely, but smaller stablecoin issuers will find it difficult to make profit if the bill becomes law.
There is still some time before the Stablecoin TRUST Act becomes law, but if it stays true to its current form, the U.S. will continue to set the gold standard in cryptocurrency regulation. So, let’s work together to make sure that the act becomes law.