The bipartisan U.S. stablecoin bill goes into negotiations, delaying it potentially up until September, per sources. But the House Financial Services Committee (HFSC) is considering releasing the bill’s discussion draft soon.
“If stablecoins are backed by high-quality assets, their risk is quite low and they can form a building block — a cornerstone — of a payment system. If there’s questions about the quality of the assets in the reserve pool backing them, then they create risk,” says Nellie Liang, Treasury undersecretary for domestic finance, to the Financial Services panel.
The lawmakers couldn’t conclude their tasks on the draft bill prior to the scheduled committee vote. This led to a no-agreement between HFSC Chairwoman Maxine Waters (D., Calif.) and Patrick McHenry (R., N.C.). This delays the committee vote on the U.S. stablecoin bill up until September, when the Congress resumes work.
The bill might ease for nonbank firms, under Federal Reserve’s oversight, to issue stablecoins upon adhering to fresh liquidity and capital standards. Among other things, the bill also tends to prevent commercial entities from acting as issuers, sources indicate. The bill delay is due to an administrative demand of increased investor protections.
Secretary Janet Yellen—in her talks with Waters raised concerns over how the bill addresses the digital assets held in custody on behalf of consumers. The treasury stressed on the need of segregating customer assets by wallet providers.
Also Read: UK to regulate Stablecoin Payments through New Markets Bill
While the Republicans support state-level wallet standards, the Democrats ask for federal protection of customer funds from crypto platforms’ assets in insolvency instances, per sources.
The Independent Community Bankers of America (ICBA) has requested Ms. Waters to delay the U.S. stablecoin bill’s consideration. The reason being the vitality of seeking comments from bankers and stakeholders.
