The U.S. House Financial Services committee made significant progress on Thursday as it advanced a new bill aimed at creating a comprehensive federal regulatory structure for stablecoins, a class of cryptocurrencies often tied to traditional assets, with the U.S. dollar being a popular choice, as per the report by Reuters.
The proposed legislation grants authority to the U.S. Federal Reserve to set forth requirements governing the issuance of stablecoins, while still upholding the regulatory powers of state-level authorities. Notably, the bill underwent revisions to address concerns raised by some Democrats regarding the potential of stablecoin issuers evading strict oversight through state-level regulations.
In a notable show of bipartisanship, several Democrats, including Representatives Jim Himes and Josh Gottheimer, joined committee Republicans in supporting the bill’s advancement.
However, the committee’s leading Democrat, Representative Maxine Waters, voiced her opposition to the bill, citing what she referred to as “major flaws,” one of which revolves around a perceived loophole that could enable commercial companies to create and issue their own currency.
As the debate unfolds, stakeholders across the financial sector closely monitor the potential implications of this landmark legislation that seeks to strike a balance between regulatory oversight and innovation within the stablecoin ecosystem.
Waters and Representative Patrick McHenry, the chair of the committee, had been in discussions about the bill for a number of weeks but were ultimately unable to reach an agreement, McHenry said.
“We had high hopes 48 hours ago that we were going to come to a conclusion and then the White House reviewed where we were and disagreed,” said McHenry.
The bill’s passage came a day after the committee advanced a separate bipartisan bill that aims to develop a regulatory framework for cryptocurrencies and clarify when a token is a security or a commodity.
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