A stablecoin may not be named or marketed as government backed
What the document says“A permitted payment stablecoin issuer may not-- (i) use any combination of terms relating to the United States Government, including "United States", "United States Government", and "USG" in the name of a payment stablecoin”
Subsection (a)(9). The second half bars marketing a stablecoin in a way that would lead a reasonable person to perceive it as legal tender under section 5103 of title 31, United States Code, as issued by the United States, or as guaranteed or approved by the Government of the United States. Subparagraph (B) provides that abbreviations directly relating to the currency a stablecoin is pegged to, such as USD, are not covered.
What the document actually says“A permitted payment stablecoin issuer may not-- (i) use any combination of terms relating to the United States Government, including "United States", "United States Government", and "USG" in the name of a payment stablecoin”
A maker may not put government words in a coin's name. It may not use United States. It may not use USG either.
It also may not sell a coin as if the government stands behind it. Short forms for the currency are fine. USD is the example the law gives.
No action is recorded against this proposal. That is not evidence that none has been taken, and nobody has yet read it against the record. See what the tracker does not yet cover.