The Biden administration is reportedly working to introduce a new legal framework catering to stablecoin issuers, classifying them similar to banks. 

Specifically, The Wall Street Journal reportedly revealed the administration’s intention to persuade Congress to come up with a new “special-purpose charter, dedicated to stablecoin issuers as well as different firms that are classified in the similar category. 

Regardless of clear details on the way the legislation will function, it’s expected to be customized particularly to these types of business models.

Legislators have reportedly been calling for a tighter regulations over stablecoins within the past months, with Federal Reserve Chairman Jerome Powell suggested to the Financial Services Committee that stablecoins such as Tether (USDT) and USDC Coin (USDC) need to fall under the same regulation as money market funds like bank deposits. 

Nonetheless, he reportedly kept an unwaveringly no stance regarding the existence of a blanket ban on Bitcoin (BTC) or other digital assets. 

In July this year, the Fed and Yale University have jointly worked to produce two regulatory frameworks for stablecoins detailed in a 49-page paper, dubbed “Taming Wildcat Stablecoins”. 

Via the paper, the authors reportedly shared that the regulators are left with two choices when it comes to stablecoin regulations – giving them the equivalent classification as public money, or taxing them out of existence via central bank digital currency.

Stablecoins – digital currencies pegged to a type of fiat value, such as the U.S. dollar – has reportedly become a $128 billion market, as revealed by most recent market capitalization figures.