• House Republicans have released a new discussion draft for stablecoin legislation.
• The draft bill aims to provide clearer definitions and regulations, including reserve requirements, classification as securities, and CEO accountability.
• Representatives Maxine Waters and Patrick McHenry are leading negotiations and hearings on the issue respectively.
House Republicans Propose Stablecoin Legislation
House Republicans have issued a new discussion draft for stablecoin legislation in an attempt to regulate the cryptocurrency sector. The proposed bill outlines provisions related to reserve requirements, classification as securities, and CEO accountability.
Classification of Stablecoins as Securities
The draft bill settles the debate over whether stablecoins should be classified as securities or not. If classified as such, it would be subject to oversight by either the SEC or Commodity Futures Trading Commission (CFTC). However, immediate bipartisan support is unlikely due to lack of Democratic input on the issue.
Reserve Requirements & CEO Accountability
The proposed legislation requires issuers of payment stablecoins to be backed by safe reserves subject to monthly reviews by registered accountants. Furthermore, chief executives of these issuers are held personally accountable for accuracy of information on reserves with potential criminal liability for false reports.
Representatives Maxine Waters & Patrick McHenry
Representative Maxine Waters has expressed frustration at the lack of Democratic input while Representative Patrick McHenry’s financial services committee is also working on legislation related to market structure in the crypto sector. A hearing scheduled Thursday April 27th will address further questions about agency roles in this sector.
This newest discussion draft provides a starting point for further negotiations between House Republicans and Democrats in order to achieve broader agreement on stablecoin regulation within the US Congress.