• The US House Financial Services Committee has dropped a new version of its stablecoin bill after receiving feedback from Democrats.
• The bill would regulate payment stablecoins and allow state regulators to supervise stablecoin issuers, with federal regulators having a primary role in issuing capital and liquidity requirements.
• The new version includes other parts, such as the treatment of customer assets by firms providing custodial services and the study on endogenously collateralized stablecoins.
The US House Financial Services Committee under its Republican leadership has dropped a new version of its stablecoin bill after receiving feedback from its Democratic members.
Regulation of Payment Stablecoins
The proposed bill aims to regulate payment stablecoins specifically, allowing state regulators to supervise stablecoin issuers, while also giving federal regulators oversight power by imposing capital and liquidity requirements.
Other Provisions Included
In addition to regulating payment stablecoins, the proposed bill also includes provisions for the treatment of customer assets by firms providing custodial services as well as a study on endogenously collateralized stablecoins. Endogenously collateralized stablecoins are defined as any digital asset “in which its originator has represented will be converted, redeemed, or repurchased for a fixed amount of monetary value; and that relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price.”
The draft will be discussed at an upcoming House Financial Services Committee hearing titled “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem” scheduled for June 13th.
Division Between Republicans & Democrats
Despite some initial bumps in the road between House Republicans and Democrats regarding how to regulate stablecoins, Chair Patrick McHenry (R-N.C.) and Rep Maxine Waters (D-Calif) worked together last year on a similar bill that had seemingly emerged before their last hearing in May 2021. However, House Democrats accused Republican counterparts of walking away from negotiations right before elections due to what they believed was a weakening of customer protections and Federal Reserve oversight when compared with their original proposal.