Florida Bill aims to regulate banks as crypto exchanges, stablecoin issuers – Ledger Insights

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The State of Florida has tabled a Bill that proposes to bring regulatory clarity to state chartered bank and trust companies that want to participate in ‘digital trust business’. That includes services such as crypto custody and crypto exchanges. Additionally, it covers banks issuing stablecoins. So far the Bill has only been introduced in the Senate and hasn’t received a Committee hearing. 

Much of the proposed legislation outlines the application process and risk analysis that banks must go through to participate in crypto. But it also appears to introduce stablecoin legislation. 

Some of the stablecoin requirements are similar to those proposed in Federal legislation. For example, backing assets would be short dated Treasuries, reverse repurchase (repo) agreements or bank deposits. A limited proportion of assets could be held in government money market funds.

Other requirements include an accountant signing off on reserve attestations every month. Stablecoin issuers such as Paxos and Circle already do that.

However, if this legislation were passed, any state bank planning to issue a stablecoin would still need Federal approval. Last August the Federal Reserve launched a program to supervise novel bank activities. As part of that program, the Federal Reserve required state banks to get a nonobjection letter from the Fed before participating in ‘dollar token’ activities, which would include stablecoins.

Florida’s anti-CBDC stance

Meanwhile, Florida’s stance is pro cryptocurrency and anti-CBDC. In 2022, Florida passed another piece of legislation supporting crypto activities for money services businesses.

Florida was amongst the first states to approve legislation to exclude central bank digital currency (CBDC) from the definition of money for business contract purposes. Theoretically that would discourage businesses from using a CBDC. Consumers wouldn’t be as heavily impacted other than for high value payments involving contracts such as buying real estate. Now there’s a flood of states planning similar laws. Last week we reported that 11 states had anti-CBDC legislation pending. A week on, the figure is now 12.


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