Stablecoin regulation still top mind despite government shutdown

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Stablecoin regulation still top mind despite government shutdown

On Friday, House Financial Services Committee Chairman Patrick McHenry said stablecoin regulation is still top of mind, despite a possible government shutdown.

Stablecoins are digital currencies that are based on the price of a sovereign currency like the U.S. dollar. Although states like New York have frameworks for issuing stablecoins, the concept of federal rules for stablecoins has lingered on Capitol Hill for years.

McHenry's confidence comes amid the threat of a shutdown that could grind parts of the US federal government to a halt. If lawmakers can't come to an agreement, a lapse in funding could be triggered as soon as Saturday.

The bill on stablecoins is one of two bills that McHenry's committee has produced this year, which aims to legislate for digital assets. The other bill focuses on market structure and clarifications digital asset oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The House would be required to make its way through the Democrat-controlled Senate and get Biden's signature before becoming the law of the land. But he said he has had 'conversations with really smart senators' on both sides of the aisle that could potentially lend a hand.

The goal is to reach an agreement that will send digital asset regulation to President Biden's desk between now and the beginning of the year, McHenry said. In a speech on stablecoin legislation, he said that'more than a handful' of Democrats supported the bill when it was produced in July.

As Blockchain Association CEO Kristin Smith said last week, Republicans and Democrats agreed on most of the stablecoin bill's text. A state-level path for stablecoin issuers to operate has been a hurdle, he said, but that an option that would provide a state-level path for them to operate has been a hurdle.

As for the role that states could play in regulating stablecoins versus the federal government, McHenry said the tension goes beyond crypto itself. But states aren't waiting for federal lawmakers to make their decisions. LegiScan reported that there are currently 17 stablecoin bills in state legislatures at the moment of writing.

s a broader regulatory issue than just digital assets, he said, adding that lawmakers' approach to innovation should embody individual rights. The power within the United States also extends to a state where you don't like the state you live in.