US House Financial Services Committee Republicans Reach Some Compromise With Democrats on Latest Version of a Stablecoin Bill
The House Financial Services Committee under its Republican leadership has dropped a new version of its stablecoin bill after receiving feedback from its Democratic members.
The bill, which is still a discussion draft, would regulate payment stablecoins specifically, and would allow state regulators to supervise stablecoin issuers, with federal regulators having a primary role by issuing capital and liquidity requirements.
The new version now includes other parts, after receiving feedback, such as the treatment of customer assets by firms providing custodial services and the study on endogenously collateralized stablecoins, according to a committee spokesperson.
The bill defines endogenously collateralized stablecoins 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,” on June 13.
A divide on how to regulate stablecoins
The newer version comes after some bumps in the road between House Democrats and Republicans in that committee over the past year.
Both seemed divided on how to regulate stablecoins during a House Financial Services committee last month.
Chair Patrick McHenry, R-N.C., and former chair of that committee Rep. Maxine Waters, D-Calif., worked together on a bill last year, but two bills had seemingly emerged ahead of that hearing.
House Democrats said their Republican counterparts walked away from stablecoin negotiations before elections and criticized the bill saying it would weaken customer protections and Federal Reserve oversight, in a tweet last month.
The truth is, Republicans walked away from bipartisan stablecoin negotiations right before the election. Now, they’ve posted a harmful bill that will:
— U.S. House Committee on Financial Services (@FSCDems) May 18, 2023
❌ strip D&I requirements
❌ weaken customer protections & oversight by the Fed
❌ give GIGANTIC private co's like @facebook the… pic.twitter.com/IRfPlYRXAQ
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