The Federal Reserve Takes the Helm of Stablecoin Regulation
The U.S. House Financial Services Committee has taken another step forward in the cryptocurrency space, presenting the third iteration of a bipartisan stablecoin bill led by its chair, Representative Patrick McHenry.
Under the working title "The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem," the bill's latest draft aims to bring much-needed regulatory transparency to the evolving world of digital assets.
According to the new draft, the U.S. Federal Reserve is proposed as the key authority responsible for shaping the standards for stablecoin issuance. Alongside this, the draft is designed to provide state-level regulators with the mandate to oversee entities involved in issuing these digital tokens.
Among the bill's notable aspects, it details guidelines on the credentials required to issue stablecoins and the regulatory expectations for payment stablecoins. Assuming the bill gains approval, it would mark a milestone as the U.S.'s first legislative document providing thorough guidance on the management and regulation of stablecoin markets. An interesting feature is the proposed two-year hold on the issuance of collateralized stablecoins from the date the bill comes into effect.
The bill's journey to enactment requires it to pass through the committee, the U.S. House of Representatives, and finally, the Senate. If successful, it will be the first instance of legislation targeting the cryptocurrency sector in the U.S.
The latest draft elevates the federal regulator's power in comparison to previous versions, including the capability to intervene with state-regulated issuers during urgent situations. Additionally, states could transfer their oversight duties to the federal watchdog when needed.
In contrast with the preceding version of the bill, which emerged on April 24 and focused on stablecoin payments, the newest version expands its scope to address other digital asset market sectors like custodial service providers and algorithmic stablecoins. This draft is sharper and extends specific powers to state legislatures, too.
According to the new draft, the U.S. Federal Reserve is proposed as the key authority responsible for shaping the standards for stablecoin issuance. Alongside this, the draft is designed to provide state-level regulators with the mandate to oversee entities involved in issuing these digital tokens.
Among the bill's notable aspects, it details guidelines on the credentials required to issue stablecoins and the regulatory expectations for payment stablecoins. Assuming the bill gains approval, it would mark a milestone as the U.S.'s first legislative document providing thorough guidance on the management and regulation of stablecoin markets. An interesting feature is the proposed two-year hold on the issuance of collateralized stablecoins from the date the bill comes into effect.
The bill's journey to enactment requires it to pass through the committee, the U.S. House of Representatives, and finally, the Senate. If successful, it will be the first instance of legislation targeting the cryptocurrency sector in the U.S.
The latest draft elevates the federal regulator's power in comparison to previous versions, including the capability to intervene with state-regulated issuers during urgent situations. Additionally, states could transfer their oversight duties to the federal watchdog when needed.
In contrast with the preceding version of the bill, which emerged on April 24 and focused on stablecoin payments, the newest version expands its scope to address other digital asset market sectors like custodial service providers and algorithmic stablecoins. This draft is sharper and extends specific powers to state legislatures, too.
