The U.S. House Financial Services Committee has released a draft of a potentially groundbreaking stablecoin bill, which proposes a moratorium on stablecoins that are backed by other cryptocurrencies, as well as a request to study a central bank digital currency (CBDC). This bill marks the first major piece of crypto legislation to move in 2023 and follows two significant incidents over the past year involving stablecoins.
The draft bill, available on the committee’s hearing page, aims to create definitions for payment stablecoin issuers, echoing a term introduced by former Senator Pat Toomey (R-Pa.) when he introduced his own stablecoin bill in 2022. The moratorium on stablecoins, such as terraUSD (UST), backed by tokens like LUNA, would be in place until a study on the subject could be conducted. The bill also requests a study of the potential impact of a CBDC issued by the Federal Reserve.
Punchbowl News was the first to report on the bill’s publication, which has been circulating among lawmakers since last fall. However, it had not been previously shared with the public. A House Financial Services subcommittee will hold a hearing on stablecoins on Wednesday, featuring Dante Disparte from Circle Internet Financial, which issues USDC; the Blockchain Association’s Jake Chervinsky; Columbia Professor Austin Campbell, and New York Department of Financial Services Superintendent Adrienne Harris.
The hearing will take place a day after the full Financial Services Committee meets to hear from Securities and Exchange Commission Chair Gary Gensler. A spokesperson for Rep. Patrick McHenry (R-N.C.), the chair of the committee, told CoinDesk that the bill’s publication on the site was not unexpected. However, a spokesperson for Rep. Maxine Waters (D-Calif.), the ranking member of the committee, did not respond to a request for comment by press time.
Stablecoins have become increasingly popular in recent years, with their value tied to an underlying asset, such as the U.S. dollar or another cryptocurrency. However, they have faced scrutiny due to their potential for destabilizing the financial system if their value were to suddenly drop or if their underlying asset were to become worthless.
The proposed legislation is likely to be of interest to crypto investors and policymakers worldwide, as the U.S. is a key player in the global cryptocurrency market. If passed, the bill would have significant implications for the industry and could serve as a model for other countries considering their own stablecoin regulations.
In conclusion, the publication of this stablecoin bill by the U.S. House Financial Services Committee represents a significant step in the regulation of the cryptocurrency industry. The moratorium on stablecoins and the proposed study of a CBDC could have far-reaching consequences for the industry, and it will be fascinating to see how the hearings play out over the coming days.
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