On 24th April, a senior Republican committee member involved in drafting the legislation provided a crucial update on the stablecoin bill proposed in September 2022. The bill majorly focused on payment stablecoins rather than seeing other aspects of digital market assets.
A new draft bill providing a framework for stablecoins in the United States was published in the House of Representatives repository. The draft bill was presented before the hearing on the topic on 19th April. United States lawmakers discussed the prospects of stablecoins in a committee hearing. However, lawmakers still need to reach a consensus among politicians.
The legislation, which is targeted at “for the regulation of payment stablecoins,” would be distinct from laws on custodial service providers, algorithmic stablecoins, and a study on central bank digital currencies. There are several developments in the stablecoin regulation that have taken place in the last few days. On 19th April, in the hearing of the United States Subcommittee on Digital Assets, Financial Technology and Inclusion, Austin Campbell, adjunct professor at Columbia Business School shared his views on the current situation of United States stablecoins regulations.
Austin Campbell said that several prominent regions worldwide like UAE, Singapore, and the United Kingdom have already developed regulations. According to him this could be detrimental for the United States and push issuers out of the country. Under the current draft, the US Fed would be in charge of non-bank stablecoin issuers. Those who will not be able to comply will face a crackdown from the authorities. Additionally, issuers have to follow certain criteria to acquire a stablecoins license. However, there’s a change in the draft bill as compared to the September bill in the new draft there’s no two-year ban provision on algorithmic stablecoins.
The country is currently going through a very confusing situation in regulating digital assets. There are some extremely critical views also emerging from several Democrat party members like Elizabeth Warren who always remained critical towards cryptocurrencies. She took a completely negative approach to digital assets and cryptocurrencies after the collapse of one of the largest cryptocurrency exchanges, FTX, last year. It will be interesting to see further developments in the United States on stablecoins regulations.