- The US House of Representatives embarks on an unprecedented hearing to clarify the digital asset ecosystem and regulate payment stablecoins.
- The proposed bill combines ideas from Republicans and Democrats, and seeks to establish strong and clear regulations on the cryptocurrency market.
- Prominent witnesses, including industry leaders such as the CEO of Circle and the president of the National Futures Association, will participate in the hearing to discuss the future of cryptocurrencies in the country.
The US House Committee on Financial Services has introduced a bipartisan stablecoin bill, aiming to provide clarity in the digital asset market and payment stablecoin regulation.
The Committee’s full hearing is scheduled for June 13 under the title “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem.”
The bill combines the ideas of the Republican and Democratic financial services committees and focuses on the regulation of payment stablecoins and other related aspects.
It includes a definition of the primary regulators of federal payments stablecoins, including the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, and the National Credit Union Administration.
Details of the bill and its implications
The bill contains detailed provisions on primary federal regulators, requirements for issuing a payment stablecoin, oversight and compliance, qualified state payment stablecoin issuers, and interoperability.
If approved, the bill establishes a 2-year moratorium that prohibits the issuance, creation, or origination of an endogenously guaranteed stablecoin that does not exist on the date of enactment of the law.
The bill also proposes an amendment to the Investment Advisers Act of 1940, which would state that payment stablecoins are not considered “securities.” Additionally, federal agencies would have greater authority and oversight over stablecoins compared to state regulators.
Committee Chairman Patrick McHenry sees this bill as the first step toward regulating cryptocurrency in the US. However, it is still unclear where the Democrats stand on the bill. . In order to become law, the bill must be approved by both the US House of Representatives and the US Senate.
SEC and CFTC jurisdiction over digital assets
According to the Digital Asset Market Structure Discussion Exposure, the Securities and Exchange Commission (SEC) would have jurisdiction over digital assets offered as part of an investment contract.
On the other hand, the Commodity Futures Trading Commission (CFTC) would have jurisdiction over the spot market for digital commodities.
The hearing will feature the participation of several prominent witnesses in the field of cryptocurrencies and digital assets. They include Jeremy Allaire, CEO of Circle, the issuer of the USDC stablecoin; Coy Garrison, partner at Steptoe & Johnson LLP; Emin Gün Sirer, CEO of Ava Labs; and Thomas Sexton III, president of the National Futures Association.