News & Insights
Draft Bill on Stablecoin Released by the US Government
Onur Küçük | MANAGING PARTNER28.04.2023
A new era is beginning for the cryptocurrency market in the US. The draft bill on Stablecoin, which will represent the first major cryptocurrency regulation in the US, has been released by the US House of Representatives in recent days.
What Has Changed with the New Regulation?
This draft bill addresses the potential effects of Stablecoins supported by cryptocurrencies and the Central Bank Digital Currency (CBDC) planned to be issued by the US Federal Reserve (FED).
Through this bill, the FED also requires making the regulation of Stablecoins' position in the financial system, its stability, and user privacy. The bill, which does not yet have a number, would require stablecoin issuers to have reserves that back the digital assets on an “at least one-to-one basis.” It can be said that this regulation is part of the increasing regulatory efforts towards cryptocurrencies in the US and has a significant impact on the future of the Stablecoin market.
If this bill is approved, all companies that want to issue Stablecoins specifically in the US will be required to register with regulatory bodies. In addition to this obligation, for organizations without a license in the banking sector, it will be possible to transfer control entirely to the FED.
In addition to the above-mentioned issues, the committee aims to examine in detail the financial problems that Stablecoins supported by cryptocurrency can create. In this review, examples of bankruptcy in the cryptocurrency sector and their results are also considered.
Who is Affected and How?
This draft proposal related to Stablecoins and CBDCs, is considered as the first major cryptocurrency regulation that will take effect throughout the US in 2023. This bill concerns all players in the crypto-assets, especially stablecoin companies.
Discussions and negotiations by committee members are still in course for the bill.
The US aims to prevent illegal transactions and actions in this area with this legal draft and aims to ensure that each stakeholder responsible in this field conducts their transactions in compliance with the law and safely. The provisions to be added and removed during the legislative process are crucial in the coming days.
What About Turkey?
There is no legal framework for Stablecoins and CBDC's in Turkey yet. Although the legislation in Turkey contains some provisions for the taxation and monitoring of cryptocurrency and other virtual assets, no concrete steps have been taken towards the regulation of Stablecoins and CBDC’s.
However, the Central Bank of Turkey launched a research and review of digital currencies and CBDCs in 2020 The Ministry of Treasury and Finance of the Republic of Turkey also announced that it was preparing a draft on the regulation of cryptocurrency and other virtual assets in 2021.
The Central Bank of the Republic of Turkey (CBRT) has announced that the first payment transactions on the CBRT Digital Turkish Lira Network have been successfully completed as part of the first phase of the Digital Turkish Lira Project being conducted under the leadership of CBRT. Accordingly, it is expected that the CBRT will continue its limited and closed pilot tests with technology stakeholders in the first quarter of 2023 and share the findings obtained from the tests with the public in a comprehensive evaluation report.