A new bill has been introduced that imposes a billion limit on non-depository fiduciary institutions to issue payment stablecoins. Once the issuer exceeds this limit, they must be “a depository institution that has been authorized as a national issuer of payment stablecoin,” according to the bill. Currently, the largest US-based stablecoin issuer, Circle (with billion in USDC outstanding), is not a fiduciary depository institution. The second largest, Paxos, has a limited-purpose trust charter through the New York Department of Financial Services, although its market capitalization falls well below the billion limit. A Senate official described the billion limit as the approximate threshold between a small community bank and a larger regional financial institution with potential systemic risk.
