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Guiding and Establishing National Innovation for U.S. Stablecoins ActSection 5 › Proposal

Five factors govern the evaluation of an application

To provide for the regulation of payment stablecoins, and for other purposes, section 5, Sec. 5. Written by .

Five factors govern the evaluation of an application

The document says “shallWho acts: primary Federal payment stablecoin regulatorsHow: statuteSec. 5 in the PDF
What the document says

“(1) The ability of the applicant (or, in the case of an applicant that is an insured depository institution, the subsidiary of the applicant), based on financial condition and resources, to meet the requirements set forth under section 4. (2) Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant.”

To provide for the regulation of payment stablecoins, and for other purposes, Sec. 5

Subsection (c). The five factors are the applicant's ability to meet the section 4 requirements based on financial condition and resources; whether a person convicted of one of the named felonies serves as an officer or director; the competence, experience and integrity of the officers, directors and principal shareholders of the applicant, its subsidiaries and parent company, including their compliance record and their ability to fulfill commitments and conditions; whether the redemption policy meets the standards under section 4(a)(1)(B); and any other factors the regulator establishes that are necessary to ensure safety and soundness.

What the document actually says

“(1) The ability of the applicant (or, in the case of an applicant that is an insured depository institution, the subsidiary of the applicant), based on financial condition and resources, to meet the requirements set forth under section 4. (2) Whether an individual who has been convicted of a felony offense involving insider trading, embezzlement, cybercrime, money laundering, financing of terrorism, or financial fraud is serving as an officer or director of the applicant.”

To provide for the regulation of payment stablecoins, and for other purposes, Sec. 5
That sentence, in plain words

First the watchdog asks if the firm can meet the rules in part four. It looks at the firm's money and means. Then it asks if a felon is an officer or on the board.

What this is about

Three more things are weighed. One is how able and honest the leaders are. One is the plan for paying holders back. The last is anything else that goes to safety.

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