- A new draft bill on stablecoin regulation, which merges both Republican and Democratic perspectives, has been proposed by the House Financial Services Committee.
- The draft bill gives the Federal Reserve additional authorities and invites the state regulators to oversee stablecoin-issuing companies.
Delving into the intricate dynamics of U.S. politics and cryptocurrency regulation, the House Financial Services Committee, headed by its Republican chair, has revealed a new draft bill aimed at overseeing stablecoin operations. Notably, this initiative tries to blend the viewpoints of both major U.S. political parties, marking a significant step towards the negotiation phase on cryptocurrency regulation in the United States.
The unveiling of this latest draft precedes the committee hearing set for June 13 and underlines the gradual shift towards bipartisan negotiation on crypto regulations, considered by many as a likely avenue to introduce cryptocurrency regulations in the U.S.
The newly proposed draft is concise, integrates additional viewpoints from Republican committee members, and is purposefully designed to initiate the integration of the parties’ respective positions, as explained by a committee spokesperson. More specifically, it entrusts the Federal Reserve with the task of drafting requirements for issuing stablecoins, while state regulators would be tasked with overseeing the entities that issue these tokens.
Significantly, this draft bill further empowers the Federal Reserve, including the ability to intervene in state-regulated issuers during emergency situations. Moreover, it gives states the option to delegate their supervisory duties to the federal regulator.
Representative Patrick McHenry (R-N.C.), the current chairman of the panel, has held stablecoin regulation in high regard since the last year. Despite earlier grievances by Democrats who claimed the Republicans were amending the bill without their collaboration, this latest draft attempts to accommodate both sides of the aisle. However, the Democratic response to this version is still unclear.
If introduced and passed by both chambers of Congress, this bill would set the first U.S. regulations for stablecoins, which are tokens tied to steady assets such as the dollar and are frequently utilized in crypto markets for trading in and out of more volatile coins.
Notably, the updated draft bill omits a previous section that advocated for research on the benefits of a digital dollar. The idea of a central bank digital currency (CBDC), while growing controversial, has been regularly criticized by Republicans. This stance is held even as the Federal Reserve insists it hasn’t established a position on the need for such a digital currency in the U.S. context.