Only a supervised person may hold reserves, collateral or private keys
What the document says“A person may only engage in the business of providing custodial or safekeeping services for the payment stablecoin reserve, the payment stablecoins used as collateral, or the private keys used to issue permitted payment stablecoins if the person-- (1) is subject to-- (A) supervision or regulation by a primary Federal payment stablecoin regulator or a primary financial regulatory agency”
Subsection (a). Two routes qualify a person: supervision or regulation by a primary Federal payment stablecoin regulator or by a primary financial regulatory agency described under subparagraph (B) or (C) of section 2(12) of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5301(12)), or supervision by a State bank supervisor or State credit union supervisor that makes the information under subsection (d) available to the Federal Reserve Board. The person must also comply with subsection (b), unless it holds the property under similar requirements set by a primary Federal payment stablecoin regulator, the Securities and Exchange Commission or the Commodity Futures Trading Commission.
What the document actually says“A person may only engage in the business of providing custodial or safekeeping services for the payment stablecoin reserve, the payment stablecoins used as collateral, or the private keys used to issue permitted payment stablecoins if the person-- (1) is subject to-- (A) supervision or regulation by a primary Federal payment stablecoin regulator or a primary financial regulatory agency”
Only some firms may hold the assets behind these coins. The same goes for the keys used to make them. The firm must answer to a watchdog.
A private key is the secret code that controls a coin. Whoever holds it controls the coin. So the law limits who may hold one for others.
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