Members of the United States House Financial Services Committee have introduced a drafted bill for regulating stablecoins in the region.
Their sole aim is to design a robust and comprehensive regulatory framework for stablecoins like U.S. dollar-pegged USDC, Tether (USDT) and others. A significant portion of these kinds of digital assets is expected to maintain their values all the time.
Markedly, this potential stablecoin bill is one of the most critical pieces of crypto legislation since the beginning of this year. Insured depository institutions like banks considering issuing stablecoin will be required to register with the appropriate agency. While non-banks will be kept under the radar of the Federal Reserve oversight. Defaulters are liable to pay huge fines or face prison time.
U.S. Committee Ask to Study Potential CBDC
Apart from the regulation of stablecoins, the bill includes other proposals for a moratorium, especially for tokens backed by other cryptocurrencies. Such a moratorium for stablecoins will be extended until a study is fully conducted.
At the same time, U.S. House Financial Services Committee requested to study the effect of a potential Central Bank Digital Currency (CBDC) issued by the Federal Reserve. While the drafted stablecoin bill was impromptu, the subcommittee on stablecoin will hold a meeting on Wednesday 19th April with several industry heavyweights in attendance.
SEC Chairman to Give Opinion on New Bill
This is exactly the day following a discussion between the entire Financial Services Committee and Securities and Exchange Commission (SEC) Chairman Gary Gensler.
Dante Disparte, Chief Strategy Officer and Head of Global Policy at Circle Internet Financial, the issuer of the USDC stablecoin will be attending the meeting with the committee. Other expected attendees are Chief Policy Officer of Blockchain Association Jake Chervinsky, Columbia Professor Austin Campbell and New York Department of Financial Services Superintendent Adrienne Harris.
TerraUSD, USDC Crash Impacts Crypto Industry
Explicitly, the stablecoin bill is coming after a few coins have met with misfortune in the industry. Do Kwon’s TerraUSD crashed last year and led to the loss of over $2 trillion from the ecosystem. In a recent disturbance in the United States financial system, the USDC has also begun to lose its pegging to the dollar and is currently fluctuating between $0.8 to $0.91.
Circle, the USDC issuer has experienced huge volumes of outflow amounting to several billion since it announced exposure to the crypto-friendly Silicon Valley Bank (SVB).
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