Draft Stablecoin Bill Published By U.S. House Committee
The U.S. House Financial Services Committee has released a draft version of a potential landmark stablecoin bill, which proposes a moratorium on stablecoins backed by other cryptocurrencies and a study of a central bank digital currency (CBDC).
The U.S. House Financial Services Committee published a draft version of a potential landmark stablecoin bill, represents the first major piece of crypto legislation to move in 2023, with proposals including a moratorium on stablecoins backed by other cryptocurrencies like UST.…
— Wu Blockchain (@WuBlockchain) April 15, 2023
Stablecoin Regulation
This represents the first major piece of crypto legislation to move in 2023 and follows two key incidents over the past year involving stablecoins: the blowup of terraUSD (UST), which was backed by a token called LUNA, and the temporary unmooring of USD coin (USDC) from $1.
The bill creates definitions for payment stablecoin issuers and echoes a term used by former Senator Pat Toomey (R-Pa.) when he introduced his own stablecoin bill in 2022. The moratorium on stablecoins like UST would last until a study can be conducted, and the bill also seeks a study of the potential impact of a CBDC issued by the Federal Reserve.
Experts testify at Subcommittee Hearing
On Wednesday, a House Financial Services subcommittee held a hearing on stablecoins featuring Dante Disparte from Circle Internet Financial, which issues USDC; the Blockchain Association’s Jake Chervinsky; Columbia Professor Austin Campbell; and New York Department of Financial Services Superintendent Adrienne Harris.
The hearing came a day after the full Financial Services Committee met to hear from Securities and Exchange Commission Chair Gary Gensler. According to a spokesperson for Rep. Patrick McHenry (R-N.C.), the chair of the committee, the bill published on the site had been circulating among lawmakers since last fall but had not previously been shared with the public.
Proposed Moratorium and CBDC Study
The proposed legislation has been met with mixed reactions from industry insiders. Some are concerned that a moratorium on stablecoins backed by other cryptocurrencies could hinder innovation, while others believe that the proposed regulations are necessary to prevent another blowup like UST.
Regardless of the outcome of the proposed legislation, it is clear that stablecoins and digital currencies are becoming increasingly important in the world of finance, and policymakers will need to stay ahead of the curve to ensure the stability and security of these emerging technologies.
