A new bill focused on stablecoins could prompt U.S. banks to enter the stablecoin market, according to S&P Global Ratings. The Payment Stablecoin Act, recently introduced to the U.S. Senate, may encourage banks to issue U.S. dollar-pegged stablecoins, potentially affecting large non-U.S entities that issue stablecoins like Tether. The bill proposes a $10 billion issuance limit on non-bank stablecoin firms, bans unbacked algorithmic stablecoins, and requires stablecoin issuers to hold one-to-one cash or cash-equivalent reserves. If approved, the bill could give banks a competitive edge by limiting non-banking institutions to a maximum issuance of $10 billion.