Tuesday, February 7, 2023

Lawmakers Believe US Stablecoin Law Could Pass This Year

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Lawmakers believe US Stablecoin law could pass this year after the collapse of Terra added more fuel to the fire for those that claim the sector needs regulatory clarity so let’s read more today in our latest cryptocurrency news.

The lawmakers believe US stablecoin law could pass by the end of the year as they noted during the Consensus 2022 back on Friday. The lawmakers worry that the lack of regulatory clarity could put the brakes on crypto innovation and the recent collapse of the TerraUSD only added fuel to the fire. Senator Pat Toomey added:

“I’m going to go out on a limb and say we get stablecoins done this year. We’re going to need to have regulatory certainty about that.”

Toomey cited broad consensus among lawmakers and policymakers and the need for action, saying that the Biden administration is interested in doing something in this space. While passing a bill in a few months is quite an ambitious goal, especially with mid-term elections coming in November, Toomey is optimistic. Senator Kirsten Gillibrand also said she conceded under normal procedures generating policy ideas between committees and waiting for a new law could be a decade:

“I think we could do a stablecoin bill between now and the end of the year because it’s urgent. We just had a financial crisis, we just had a meltdown.”

Lummis’ Bitcoin Bill, btc, regulation
Cynthia Lummis. Source C-Span

Cynthia Lummis also was on the panel at the Consensus 2022 and proposed a bill to resolve issues around the crypto taxation issues. Gillibrand added that there’s a disruption beucase there’s no regulation and it is not fair to the entire industry to exist with no guidance or rules. The new US crypto laws could require stablecoin issuers to have the right to reserves and disclose the holdings thus reducing the likelihood of the kind of market panic which led to the collapse of Terra USD last month. The broader legislation on the proposed model will see to give issues greater clarity over who they have to report to and settle a turf war between the regulators.

Like with any law, it will need to pass the House Of Representatives but there are some lawmakers that are optimistic this can also be pushed through. Rep. Patrick McHenry said:

“We’re close to the significant movement and in a big bipartisan way on stablecoins in the House. This summer, you’ll see a bipartisan bill out of the House Financial Services Committee on asset-backed stablecoins.”

He continued:

“If … we have a broad agreement on this and the chair prioritizes it, you can see that reported out of committee and voted on the House floor before the election. That’s a pretty fast clip from a bill introduced, to it potentially being signed into law before the end of the year.”

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