The Republican chair of the House Financial Services Committee has unveiled a new draft of the leading U.S. legislative proposal for overseeing stablecoins, incorporating positions from Democratic lawmakers. It is essential to know that this is the third draft of a stablecoin bill this year.
The draft bill, posted on Thursday, is a starting point for further discussion during a committee hearing on June 13. It represents a potential move toward bipartisan negotiation on crypto regulation, which many believe could be the first step toward comprehensive U.S. regulation of the digital asset industry.
The latest draft aims to merge the positions of both parties, incorporating additional points from Republican committee members. While it proposes that the Federal Reserve write requirements for issuing stablecoins, it still allows state regulators to oversee the companies issuing the tokens. The draft provides the Fed with expanded authorities, including the power to intervene against state-regulated issuers in emergency situations. Furthermore, states would have the option to delegate their supervision duties to federal regulators.
Continued efforts and scope of the bill
Chairman Patrick McHenry (R-N.C.) has prioritized stablecoin legislation since last year, even before assuming the committee chairmanship. Despite concerns from Democrats about Republican-driven revisions, the bill’s narrow scope, and prior bipartisan support have been seen as its strengths. However, the latest version’s reception among Democrats is yet to be determined.
If introduced and passed by both chambers of Congress, the bill would establish the first U.S. regulations for stablecoins. These tokens, tied to stable assets like the dollar, are widely used in crypto markets for trading and mitigating volatility.
The new draft removes a section that previously called for research on the merits of a digital dollar, a controversial idea criticized by Republicans. Notably, the Federal Reserve has maintained that it has yet to decide whether a central bank digital currency (CBDC) is warranted for the U.S.
While the bill is a significant step toward regulatory oversight of stablecoins, it still requires further scrutiny and approval from the House and the Senate to become law. The upcoming committee hearing on June 13 will shed more light on the perspectives of lawmakers and witnesses regarding the future of stablecoin regulation in the United States.