Stablecoin regulation finds footing with Republicans, what you need to know
- The Republicans on the House Financial Services Committee (HFSC) brought forward a discussion draft of legislation for regulating stablecoin issuers.
- The bill also aims to update and clarify U.S. law to ensure that stablecoins are not securities.
The tussle between lawmakers and regulatory bodies in the U.S. continues. On 24 April, Republicans on the House Financial Services Committee (HFSC) brought forward a discussion draft of legislation for regulating stablecoin issuers.
The Republicans may revive negotiations with the Democrats with the new draft. It serves as a “starting point” for discussions about stablecoin regulation with House Democrats, the Senate, and the White House, according to Republican Party aides.
The recent bill focuses on the regulations controlling the registration and approval procedures for potential stablecoin issuers. The parliamentarians suggest that stablecoin issuers should be authorized. Moreover, either a “registered State qualified payment stablecoin issuer” or “a federal payment stablecoin regulator” should govern these coins.
Stablecoins are not securities, the bill says
The bill also aims to update and clarify U.S. law to ensure that stablecoins are not securities. As a result, the Securities and Exchange Commission (SEC) should not regulate it. This move would put an end to the dispute over whether tokens are securities or commodities in order to determine which agency would overlook them, the SEC or the Federal Trade Commission (FTC).
US lawmakers recently chastised SEC Chair Gary Gensler for “hurried” bitcoin rule-making. Notably, they asked SEC’s Chairman to defend his regulatory agenda on crypto assets and the speed with which it is developing rules. The House has voiced its worries about developments in the cryptocurrency field, including their regulation. The Committee claims that it is attempting to bring some order to the industry through the said discussion bill.
In 2022, the HFSC brought forward a bill that was aimed at subjecting stablecoin issuers to the oversight of the Federal Reserve. The primary goal is to create new reserve requirements that will protect clients in the event of insolvency.
Cryptocurrency exchanges have seen an increased demand for stablecoins with time. The stablecoin market is estimated to be worth $180 billion, despite the absence of a clear legislative framework.