Regulators Quietly Create Stablecoin Framework to Support Fed Debt

The US government is quietly creating a regulatory framework for stablecoins that could make them the Fed's debt buyer of last resort.

Circle President Heath Tarbert testified before Congress on Sept. 2, stating that placing digital-dollar infrastructure under US rules could reinforce the currency's global role.

Tarbert argued that regulated stablecoins can spread private use of dollar-denominated tokens and add demand for short-term Treasuries.

The GENIUS Act issuer framework requires one-to-one permitted reserves, redemption at par, disclosures, supervision, and financial-crime compliance. These rules can improve reserve quality and influence where issuers locate.