Republicans on the United States House Financial Services Committee recently introduced a new draft of legislation aimed at regulating stablecoin issuers. The bill seeks to regulate the registration and approval process for individual prospective stablecoin issuers. Stablecoins are a type of cryptocurrency that is issued by private entities and designed to maintain a stable value pegged to a traditional asset like the U.S. dollar or a short-term Treasury bill.
The new draft legislation is half the length of a previous draft and contains many of the same features, such as the requirement that payment stablecoin issuers be approved and regulated by either a “federal payment stablecoin regulator” or “a registered State qualified payment stablecoin issuer.” To be approved as an issuer, a stablecoin provider would need to meet reserve capital requirements and provide monthly disclosures of their reserve portfolios. The bill clarifies and updates U.S. law to confirm that stablecoins are not securities, and should not be regulated by the SEC.
The new draft legislation envisions a larger role in the market for state regulators, providing them with more flexibility regarding specific requirements for approval of stablecoin issuers, as long as these requirements meet a basic “floor” outlined in the federal legislation. The bill further provides states with more time to investigate and resolve potential noncompliance issues that arise with those states’ approved issuers.
If passed into law, the proposed stablecoin regulation could increase legitimacy and stability for stablecoins, which are currently largely unregulated. This, in turn, could increase confidence in the cryptocurrency market as a whole and lead to increased adoption of digital assets. However, it could also increase regulatory compliance costs for stablecoin issuers, making it more difficult for new players to enter the market. It could also lead to increased fragmentation and a patchwork of regulations across different states, creating additional compliance challenges for stablecoin issuers operating in multiple jurisdictions.
The stable digital assets market is believed to be worth more than $180 billion and operates with no specific legislative framework. This has led to what lawmakers describe as a turf war between regulators, with the Commodities Futures Trading Commission seeking to regulate stablecoins as commodities, and the Securities and Exchange Commission seeking to regulate them like securities.
This new draft legislation released by House Republicans is a step towards establishing clearer guidelines for stablecoin issuers and increasing regulatory certainty in the market. However, it remains to be seen whether it will be passed into law, as any bill would need approval in both the House and Senate before going to President Joe Biden’s desk to be signed into law
Disclaimer:
GlobalStablecoins.com is an informational website that provides news about coins, blockchain companies, blockchain products and blockchain events. Don’t take it as investment advice. Speak to an advisor before you risk investing in an ICO, Cryptocurrencies, Cryptoassets, Security Tokens, Utility Tokens, Exchange Tokens, Global Stablecoins, Stablecoins or eMoney Tokens. GlobalStablecoins.com is not accountable, directly or indirectly, for any damage or loss incurred, alleged or otherwise, in connection to the use or reliance of any content you read on the site.
Affiliate Disclosure / Sponsored Posts:
If a Sponsored Post contains any mention of a crypto project, we encourage our readers to conduct diligence prior to taking further action. GlobalStablecoins.com does not recommend that any cryptocurrency should be bought, sold, or held by you. Do conduct your own due diligence and consult your financial advisor before making any investment decisions.
GlobalStablecoins.com may receive compensation for affiliate links. Should you perform activities in relation to an affiliate link, it is understood that some form of compensation might be made to GlobalStablecoins.com. For example, if you click on an affiliate link, and sign up and trade on an exchange, GlobalStablecoins.com may receive compensation.
Before you invest in Cryptoassets you should be aware of the following,
Cryptoassets are considered very high risk, speculative investments.
If you invest in Cryptoassets you should be prepared to lose all your money.
All Sponsored Posts are paid for by crypto projects, coin foundations, advertising firms, PR firms, or other marketing agencies. GlobalStablecoins.com is not a subsidiary of any marketing agency, nor are we owned by any crypto or blockchain foundation.
The purpose of offering Sponsored Posts to our advertisers is to help fund the day-to-day business operations at GlobalStablecoins.com.
If you come across a Sponsored Post which you believe is fraudulent and/or “scammy,” please contact us and we will perform an immediate investigation
All Rights Reserved | GlobalStablecoins.com