US House Committee Unveils New Draft of Stablecoin Bill

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Key takeaways:

  • The third version of the stablecoin legislation was put out by the House Financial Services Committee’s chairman and has been made public.
  • The measure also addresses regulations on who is permitted to issue stablecoins and what is required of a payment stablecoin.

The third version of the stablecoin legislation put out by Representative Patrick McHenry, chair of the US House Financial Services Committee, has been made public. Bipartisan committee members from both parties have contributed specific suggestions to the most recent draft of the bill. 

The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem, a draft bill, was initially put up on June 8 and is anticipated to be considered at the forthcoming committee hearing on June 13.

Among the primary authorities that are charged with creating specifications for the issuance of stablecoins in the most recent version of the bill, the US Federal Reserve is listed as the primary authority. The measure also wants to provide state officials the authority to monitor the businesses issuing the tokens.

As part of this measure, the government also addresses the issue of who is allowed to issue stablecoins and what the requirements are for stablecoins that are used as a payment method. If passed, the bill will be the country’s first in-depth advice on monitoring and enforcing stablecoin marketplaces. According to the law, collateralized stablecoins are also subject to a two-year moratorium from the date of enactment of the law.

In comparison to the earlier version, the most recent version also gives the federal regulator some more power. There are several capabilities that can be put into place, including the ability to take action against issuers governed by the state immediately. If required, states would also be permitted to transfer their oversight responsibilities to the federal monitor.

The earlier draft of the legislation, which was published on April 16, concentrated on stablecoin payments rather than regulating other facets of the markets for digital assets, like custodial service providers and algorithmic stablecoins. The most recent version of the law is more transparent and also gives state legislators particular authority.

Recently, the Philippines’ financial regulator has decided against rushing the publishing of a legal framework for the cryptocurrency industry, which was earlier planned for late 2022. The regulatory authority postponed its effort to look into the reasons behind the FTX exchange’s collapse and ensure investors’ protection.

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