After listening to Luke Gromen on Coin Stories podcast, I have a proposal:

Allow US regulated banks to issue FDIC backed stablecoins under the following conditions:

1. Each bank is responsible for their own coin (no collusion of rules, funds,etc, and no government intervention so no CBDC risk)

2. 100% funded by treasuries and the treasuries allocated to the coin must never go below 100% (so the FDIC will never be used to pay coin redemptions). If the bank fails outside of the coin, FDIC would backstop the tradfi element.

Under this proposal the customer gets :

- competition for their dollar IOU so accountability.

- protection from rug risk with FDIC insurance

The federal government gets guaranteed buyer of treasuries.

The bank gets interest income on 0% loans gladly given to them by customers.

Non-FDIC stables would be drained and the US would get citizens of countries from all over the world with ability to purchase USTs with little to no friction.