Proposed US legislation seeks to solidify the supremacy of the dollar and combat the evasion of sanctions through stablecoins.

Lawmakers in the United States are increasingly focusing on stablecoins due to their potential benefits and risks. Stablecoins, unlike traditional cryptocurrencies like Bitcoin and Ether, are designed to have less price volatility, making them suitable for everyday consumer transactions. However, there are concerns that stablecoins are being used by illicit actors, such as drug dealers and terrorist groups, for their day-to-day payments. Some lawmakers argue that without proper regulation, stablecoins could undermine the dominance of the US dollar. In response to these concerns, bipartisan legislation has been proposed in both the Senate and the House of Representatives to create a regulatory framework for stablecoins. The proposed legislation aims to promote US dollar dominance and preserve the dual banking system. It also seeks to address the potential risks of stablecoins, such as enabling rogue actors to evade economic sanctions. However, there are still challenges to passing stablecoin legislation, including the limited legislative calendar in an election year. Despite these challenges, there is growing momentum and bipartisan interest in passing stablecoin legislation in 2024. If enacted, stablecoin legislation could have significant implications for the financial industry, including potential mergers between banks and stablecoin issuers. However, stablecoins can still flourish even without regulatory action, as they are already popular in countries with weak currencies. Overall, there is a growing recognition that bringing stablecoins within the regulatory framework is preferable to leaving them unregulated.