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Milestone - Draft Stablecoin Bill Released
Over the weekend, the U.S. House of Representatives Financial Services Committee released a draft version of the landmark stablecoin bill, arguably representing the first major cryptocurrency legislative movement in 2023.
Proposals for the 73-page draft legislation include a moratorium on the use of stablecoins backed by other cryptocurrencies, as well as a study of central bank digital currency (CBDC) requirements.
The bill also proposes giving non-bank stablecoin issuers access to central bank funding. Any bank or non-bank applicant must receive a decision within 90 days or they will be automatically approved. The penalty for operating an unlicensed stablecoin has been set at $100,000 per day.
The proposed bill introduces new rules and regulations for payment stablecoin issuers in the United States. The legislation would explicitly give non-bank stablecoin issuers full access to central bank deposit accounts and central bank borrowing. Even the Treasury recognizes that central bank deposits are potentially the safest asset backing. Other acceptable stablecoin-backed assets are physical cash, short-term Treasury bills, and treasury-based repurchase agreements.
The House Financial Services Subcommittee followed up with a hearing on stablecoins on Wednesday, attended by Circle’s Dante Disparte, Blockchain Association’s Jake Chervinsky, Columbia University professor Austin Campbell and New York Department of Financial Services Director Adrienne Harris.
However, skeptical comments from leading Democrats have raised some concerns about the possibility of U.S. stablecoin legislation — the first real regulatory effort from Congress that the crypto industry has been eagerly awaiting.
The hearing is related to a discussion draft introduced last year by Reps. Maxine Waters and Patrick McHenry.While Republicans have praised the effort put into the bill, Democrats have dismissed it as outdated.
In his opening remarks, Waters said the bill was a joint effort, but negotiations over its terms were still incomplete, and “unfortunately, a lot has happened between last fall and now,” such as the collapse of cryptocurrency exchange FTX.
“McHenry said I was a little surprised that MPs on his side had introduced a whole new bill. The published bill in no way represents a negotiation between us — I think we’re starting from scratch,” he noted.
The chairman of the subcommittee presiding over the hearing, Republican Rep. French Hill, said that the bill is a product of bipartisan cooperation and "can be called Maxine McHenry."
But Rep. Stephen Lynch, the ranking Democrat on the Digital Assets subcommittee, said lawmakers should question “the need for a stablecoin.” He said the wording of the draft released by Republicans was "outdated" and did not reflect any lessons from the collapse of major crypto companies last year.
Still, McHenry, who chairs the Financial Services Committee, made his point: The need for a federal bill around stablecoins is clear.
"This is important to us, both internally and externally. It is very critical that we have the same understanding on a bipartisan basis about the utility and importance of this legislation."
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"Two-pronged approach"
In addition to the stablecoin bill mentioned above,The U.S. House of Representatives and Senate are actually working together on another bill to create new market structure rules around digital assets. If all goes well, this could become the first major encryption legislation in the United States.
The details of this Republican-led move to regulate the crypto market are still being negotiated,The aim is to introduce this spring or early summer, it and a stablecoin bill will achieve bipartisan consensus in both houses of Congress and eventual approval by President Joe Biden to provide more specific rules for digital assets.
House Financial Services Committee Chairman Patrick McHenry and Agriculture Committee Chairman Glenn Thompson are both senior players in the House on market structure.
Thompson drafted legislation on spot crypto markets in the last Congress, and his committee has jurisdiction over commodity laws, since many commodities come from agriculture. The Pennsylvania Republican said the agriculture committee was working "from scratch" while "partnering" with the financial services committee, but the two chairmen agreed earlier this year on principles related to new legislation governing the crypto market. .
“We are building out the agriculture and financial services components of the securities and commodities regime from those principles to achieve the overall market structure bill,” McHenry said.
It would appear that the Financial Services Commission has the greatest jurisdiction on the subject, even having the power to rewrite securities laws that are critical to the regulation of the crypto market.
The legislative effort gained ground recently when House Republicans began coordinating with Sen. Cynthia Lummis, R-Wyoming, and Rep. Kirsten Gillibrand, D-N.Y. The pair were the authors of a high-profile, wide-ranging cryptocurrency policy bill in the previous Congress.
Lummis said in an interview that the pair were expected to reintroduce a previous version of the encryption legislation ahead of an upcoming industry meeting later this month, but they have pushed back the timeline to coincide with the work of the House of Representatives.
"We're going to try to work with them and see if we can find a way to bring the two concepts together," Lummis said. "So I think, the bill might look a little bit different, but we're trying to merge ideas and once that's done, the legislation Work will be easier to move forward."
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Senate Banking Committee chair's 'crucial vote'
Bipartisan cooperation in proposing legislation will definitely help advance the legislative process,But Senator Sherrod Brown, D-Ohio, chairman of the Senate Banking Committee, and the Treasury Department will also play an important role in the legislative process。
It could even be argued that one of the main sticking points will be whether any legislation will win the necessary support from Sherrod Brown. He has so far made no clear comments on his position, while other Democrats on his committee have said that giving the financial industry any tailor-made regulation may only encourage a practice they deem too dangerous and fundamental. An industry that does not need to exist.
A spokesperson for Brown previously said that stablecoins are not currently being used for payments and that Brown is "continuing to carefully study all the different approaches his colleagues have come up with." However, given the skepticism of Democrats, reaching a consensus will not be easy.
Additionally, Brown himself has yet to express much enthusiasm for legislation surrounding digital assets. The Ohio Democrat admitted after a hearing in February that he doesn't believe cryptocurrencies have a "real role" in the financial system, and to make matters worse, Brown largely defers to the SEC chairman. Gary Gensler's opinion, this is undoubtedly a bit of a sweat.
As we all know, Gensler has made it clear on several occasions that he believes that cryptocurrencies are securities and should be subject to securities laws.
"We're in talks with Gensler," Brown said when asked about encryption legislation after a committee hearing in February. Be proactive."
Judging from Brown’s remarks alone, he still approves of the SEC’s regulatory actions, and tends to put cryptocurrencies in a less important position. Frankly speaking, this is likely to be bad news for the overall encryption legislation process in the United States-when the two parties themselves have disputes over the encryption bill, his addition may make it more difficult to make legislation and achieve "clear encryption supervision." ” goals will also take longer.
Now or never.The U.S. Appears to Have Reached a Critical Watershed on Crypto RegulationHowever, if there is no substantial progress on legislative issues, it will only push the participants in the encryption field, who are already silent under the pressure of regulators, further overseas to regions that are more inclusive and friendly to the industry—in this In this case, how will American legislators choose?
