Draft bill suggests separating legislation on payment stablecoins and digital asset markets

Republican lawmakers with the United States House Financial Services Committee person released a draught of a measure focused connected outgo stablecoins alternatively than overseeing different aspects of integer plus markets.

A elder Republican committee staffer progressive successful drafting the authorities told reporters connected April 24 that they had narrowed the scope of a stablecoin measure proposed successful September 2022 successful effect to feedback from lawmakers. The bill, aimed astatine providing “for the regularisation of outgo stablecoins,” would beryllium abstracted from authorities focused connected custodial work providers, algorithmic stablecoins, and a survey connected cardinal slope integer currencies.

Under the existent draught of the bill, the Federal Reserve would mostly beryllium successful complaint of non-bank stablecoin issuers. The issuers would besides person to conscionable definite national criteria to besides suffice arsenic a outgo stablecoin issuer adjacent nether a authorities charter. In addition, the wording of the draught measure nary longer included a two-year prohibition connected algorithmic stablecoins archetypal projected successful September 2022 successful the aftermath of the depegging of TerraUSD Classic (USTC).

"Permitted outgo stablecoin issuers shall support reserves backing the issuer’s outgo stablecoins outstanding connected an astatine slightest 1 to 1 basis," said the draught bill. "In immoderate insolvency proceeding [...] claims from persons holding outgo stablecoins issued by the permitted outgo stablecoin issuer shall person precedence implicit each different claims against the outgo issuer."

The measure represented a important change from a draught released anterior to an April 19 committee proceeding connected stablecoins. For that bill, Financial Services Committee ranking subordinate Maxine Waters said the draft was not typical of a compromise betwixt Democratic and Republican enactment members. The staffer said they had shared the latest draught with Democratic unit members and were awaiting feedback.

Related: Stablecoins are solution to crypto’s banking problem, exec says

The draught measure came arsenic stablecoins proceed to beryllium the people of regulators successful the United States. In February, the U.S. Securities and Exchange Commission issued a Wells notice to Paxos implicit Binance USD (BUSD), and lawmakers person scheduled hearings to research the illness of Silicon Valley Bank, which resulted successful USD Coin (USDC) temporarily depegging from the dollar owed to Circle’s exposure.

Lawmakers successful some the U.S. Senate and House person previously projected antithetic avenues for regulating stablecoins done legislation, but galore attempts person failed to pass. Any measure would request support successful some the House and Senate earlier going to President Joe Biden’s table to beryllium signed into law.

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