CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
US English

Crypto industry hails US stablecoin regulation moves

By Daniel Tyson

19:33, 16 February 2022

Illustration of stablecoins
Stablecoin issuers would be regulated by the US Office of the Comptroller of the Currency - Photo: Shutterstock

The cryptocurrency industry is praising a bill introduced this week clarifying what stablecoin is and how to regulate them, but the legislation’s future is unclear as the US Congress has failed to act on any digital currency rule making.

The bill’s sponsor, Josh Gotthiemer (Democrat-New Jersey), said the Stablecoin Innovation and Protection Act defines what qualifies as stablecoins, puts protections in place for consumers and investors and supports ongoing fintech innovation in the US.

Kristin Smith, executive director of the Blockchain Association, said the bill is the most “comprehensive and well-thought-out stablecoin legislation we've seen to date.”

“We are pleased that Congress is taking a proactive approach by engaging with stakeholders in industry and government as they consider the best path for stablecoin regulation,” she said in a statement.

Circle’s chief strategy officer and head of Global Policy, Dante Disparte, said the legislation takes a thoughtful, risk-based approach to stablecoin innovations and how to them fit inside American Federal regulatory frameworks.

“Supporting bank and non-bank innovations in the payment system is key to long-range competitiveness and broad optionality for how dollars move in the 21st century,” he said in a statement.

Tucked inside

The bill would designate certain stablecoins as “qualified”, making them redeemable on a one-to-one basis for US dollars.


0.10 Price
+8.570% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.0012872


0.00 Price
-6.610% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.00000338


0.63 Price
+0.370% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 22:00 (UTC)
Spread 0.01168


44,129.45 Price
+0.260% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

If enacted, both bank and non-bank financial institutions could issue them subject to the coins meeting certain conditions on reserve requirements with cash collateral held in a segregated Federal Deposit Insurance Corporation (FDIC)-insured account.

Stablecoin issuers would be regulated by the Office of the Comptroller of the Currency (OCC). Additionally, the OCC would release leverage ratios, auditing requirements, anti-money laundering/know-your-customer compliance regulations.

Additionally, in an effort to protect consumers, the Federal Deposit Insurance Corporation (FDIC) will be required to develop a Qualified Stablecoin Insurance Fund to manage the insurance of redemption payments of non-bank issuers.

These provisions, the Congressman said, protect against systemic risk, fraud, and illicit financing, the cornerstone of the Biden Administration’s plan to deal with the uncharted digital asset market.

Pigeonholed bills

Gottheimer said he is still seeking input from Capitol Hill and the cryptocurrency industry and this will likely be the first of many attempts to hammer out regulations acceptable to both.

During the most recent session of Congress, a number of digital asset bills were introduced, but as of Wednesday afternoon, have not made it out of committee.

Related topics

Rate this article

Related reading

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Still looking for a broker you can trust?

Join the 570.000+ traders worldwide that chose to trade with

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading