It also could force a company like Circle to get FDIC insurance on the holdings
If that were to happen do you think some of the companies could go the same way various credit unions have? For example, in Michigan weed is legal at the state level, but not the federal level. Many non FDIC insured credit unions have been able to handle those weed fund where Federally insured Credit Unions and banks can't.
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That said, if they do not want to have the FDIC, they can avoid becoming a depository institution and lending platform. Instead they could just do as they are now, providing stablecoins. If they do have the other features, then they might be forced into FDIC.
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I dont think the stablecoin issuers will be given a chance to go the credit union route. Those entities are set up differently. It is the regulators who are going to force the likes of Circle to follow the banking regulation.
Personally, I dont think they will have a choice in the matter.
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Probably not for the existing ones, but what about new ones that pop up after the fact? Fun fact, we actually have places that put billboards on the side of the highway letting people know their weed money is safe with them!