The U.S. STABLE Act, which is currently under consideration, is set to bring about significant changes in the stablecoin industry. A recent report by Nansen has identified potential winners of this legislation, with compliant issuers like Coinbase, PayPal, and Visa emerging as key beneficiaries.
Regulation of stablecoins in the U.S. is expected to be more stringent with the introduction of the STABLE Act. This legislation, which was approved by the U.S. House Financial Services Committee on April 2, aims to safeguard holders, ensure transparency from issuers, and reinforce the position of the U.S. dollar.
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One of the key requirements of the STABLE Act is the implementation of full reserves, which must be held in cash or U.S. Treasuries. Additionally, interest payments to holders will be prohibited, and stablecoin issuers must operate as licensed banks, approved state trusts, or entities regulated by the U.S. Office of the Comptroller of the Currency.
Coinbase, Visa, and PayPal Positioned to Benefit
It is anticipated that entities that are already compliant with regulatory standards will reap the most benefits from the STABLE Act. Among these, Coinbase emerges as a frontrunner, particularly due to its role as a major distributor of Circle’s USDC stablecoin.
Circle’s USDC aligns well with the requirements set forth by U.S. regulators and has a strong focus on transparency. The company has also successfully navigated the stringent regulations of the EU through its MiCA compliance, establishing itself as a leader in Euro-based stablecoin issuance.
PayPal is another contender for success under the STABLE Act, having launched the PYUSD stablecoin in partnership with Paxos. While PYUSD currently holds a small market share, the legislation could potentially open up new avenues for PayPal to integrate stablecoins across its diverse range of services.
Visa and Mastercard, two major players in the credit card industry, are also poised to benefit from the STABLE Act. Both companies have already begun exploring the use of stablecoins, with Visa testing USDC for card settlements. In the future, these firms could incorporate stablecoins into their core operations.
Interestingly, the report does not mention USD1, a stablecoin recently introduced by World Liberty Financial, which has ties to former President Trump. While USD1 meets the criteria outlined by Nansen for potential winners, it lacks the strong ecosystem that entities like Coinbase, PayPal, and Visa possess.
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