• House Republicans are pushing for a new bill to regulate stablecoins, setting up shared federal and state oversight.
• The draft legislation states that stablecoins are not securities and outlines requirements for reserves and monthly reviews.
• It is uncertain if there will be bipartisan support for the effort.
House Republicans Propose Stablecoin Bill
House Republicans on the Financial Services Committee have proposed a new bill in an effort to better regulate stablecoins. The proposed legislation sets up shared federal and state oversight of these digital currencies and clearly states that stablecoins are not securities.
Requirements for Reserves & Monthly Reviews
The draft bill also outlines key requirements regarding reserves held by issuers of stablecoins, including ensuring they are fully backed by safe assets and subject to monthly reviews by registered accountants. These regulations would eliminate the possibility of algorithmic-backed tokens being able to comply with them.
Uncertainty Around Bipartisan Support
It remains unclear if this proposed legislation will receive bipartisan support from lawmakers in Congress, as Democrats have previously called for a do-over due to their concerns about the initial draft of this bill.
Previous Draft Included Algorithmic Stablecoins
The previous version of this bill included provisions related to algorithmic stablecoins, which were absent from the current discussion draft revealed Monday afternoon. This may indicate a shift in focus towards payment stablecoins only, since algorithmic tokens would no longer be allowed under its terms.
Conclusion
The debate over how best to regulate stablecoins continues as House Republicans push forward with their latest proposal on the matter. It remains uncertain whether or not it will receive sufficient support from both sides of Congress in order to become law at present, but negotiations around it are still ongoing nonetheless.