Congressman: Congress May Reject US Regulators That Want Stablecoins to Be Banks’ Exclusive Territory

  • Democrats in the house financial services committee have been discussing less restrictive stablecoins requirements than that required by the financial regulators and the treasury department. 

A United States lawmaker familiar with the stablecoins legislation discussed in Congress and said that it is unlikely that the house will stick with the regulator’s recommendations. According to the Congressman, regulators want stablecoins issuance and related matters to be an exclusive purview of banks.

United States Regulators on Stablecoins

Democrats in the house financial services committee have been discussing less restrictive stablecoins requirements than that required by the financial regulators and the treasury department. A senior member of the committee, Jim Himes (D-Conn,), said the bill would enable non-bank companies to have government licenses as stablecoins issuers.

While Himes is a member of this committee, however, he is not working directly on the Stablecoins legislation. Worth noting, he is the sub-committee chairman for another legislation. According to him, Some lawmakers predict that approving a bill for stablecoins regulation is possible sooner than later. However, the house democrats must also sign off on such a bill.

Stablecoins regulation has become necessary, given that it has become an essential part of the newer crypto market. In a recent interview, Himes said it is likely that there would be options for banks and non-banks. He added that Maxine Waters (D-Calif) and Rep. Patrick McHenry (R-NC) are working to create a bill strictly for stablecoins regulation.

Himes further said this bill would likely cover all kinds of reserves and won’t be limited to a specific type of issuer. If that happens, it will contradict a 2021 report from President Biden’s working committee on financial markets. The committee recommended that only ‘insured depository institutions’ should offer stablecoin tokens. Also, there must be a body that supervises and regulates their activities.

Notably, stablecoins enable holders to enter or exit the highly volatile crypto markets seamlessly. Worth noting, Tether’s USDT and Circle Internet Financial’s USD Coin (USDC) are the top two dollar-pegged stablecoins used for this purpose. However, financial regulators assume they are the riskiest crypto sector, considering recent rug-pulls and crashes in the crypto space in recent months.

A Compromise?

The working group also suggested that Congress act swiftly to create stablecoin legislation. A similar aim that the committee hopes to achieve. However, it is worth noting that the details of the bill and main requests from the regulators do not align with one another.

In a statement, McHenry said all parties concerned agree that legislation is essential. However, he further said that the best option is to implement a non-bias approach similar to the introduction of last year’s crypto bill. Recently, most republican lawmakers have disagreed with the democrats that stablecoins should be the exclusive reserve of banks.

Sen. Patrick Toomey (R-PA) proposed a new license strictly for stablecoin issuers. Thus, they can add this business by running the usual depository institution. However, the committee is still discussing details of this bill on how non-banks can issue stablecoins.

Nevertheless, the President wants the bill’s enactment to be as fast as possible. However, Himes isn’t convinced that Congress would approve a stablecoin bill this year. He claims it would be impossible to get the needed votes to make it happen this year.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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