If the new bill passes, banks could flock to the stablecoin: S&P Global

coin The U.S. Senate’s proposed Payment stablecoin Act could encourage banks to participate in issuance dollar-pegged stablecoin, spelling problems for large non-U.S. entities such as Tether, global ratings firm S&P Global Ratings said in an April 23 research note. The rating agency considers stablecoins to be a potential key financial market pillar, noting that BlackRock’s recently launched BUIDL fund is a testament to its efficiency and safety in tokenized assets and digital bonds. The bill proposes a $10 billion issuance limit for non-bank stablecoin companies, a ban on “no-account” Algorithmic Stablecoin, and a requirement for stablecoin issuance to hold one-to-one cash or cash equivalents reserves. S&P said the new rules could give banks a competitive advantage by limiting the maximum long issuance of $10 billion for institutions without a banking license. However, the rating agency noted that a $10 billion issuance to non-bank companies could spell trouble for Tether because it is not a stablecoin that allows payments.