New York Attorney General Letitia James has proposed applying banking regulations to stablecoin issuers, including mandatory FDIC insurance requirements. This initiative aims to mitigate systemic risks and uphold financial system integrity by subjecting cryptocurrency firms to oversight standards equivalent to traditional banks.
James criticized existing legislative proposals like the STABLE Act and GENIUS Act as having insufficient regulatory measures. She also raised concerns about gaps in the Digital Asset Market CLARITY Act, highlighting deficiencies in current regulatory frameworks governing stablecoins.
The proposal forms part of James’ ongoing push for stricter cryptocurrency oversight. While bank-equivalent regulations could boost consumer confidence and reduce systemic vulnerabilities, industry analysts warn such requirements may present significant compliance challenges for stablecoin issuers operating in the digital asset space.