Regulatory Framework for Stablecoins Faces Challenges
Legislation for a comprehensive regulatory framework for stablecoins in the U.S. may encounter some obstacles, as Federal Reserve Chair Jerome Powell advocates for a substantial federal role in regulating the industry. In a testimony to the House Financial Services Committee, Powell expressed his belief that stablecoins should be considered as money, and the central bank should play a role in approving their issuance.
Top Democrat is also concerned
Democratic representative and House Financial Services Committee member Maxine Waters has also voiced criticism toward the Republican-led proposal allowing state regulators to approve stablecoin issuance. Waters expressed concerns about the expanded role of state preemption that could result from the proposal.
Stablecoin framework
Major U.S. stablecoin company Circle, along with others in the industry, supports the development of a new framework for stablecoin issuers. Fintech firms, particularly those involved in payment services, have long expressed frustrations with the lack of a single, nationwide registration for doing business in the U.S., as they currently need to register state-by-state as money service providers. The proposed bill seeks to simplify this process for stablecoin providers, while also subjecting them to disclosures and regulatory oversight. House Financial Services Committee Chair Patrick McHenry expects a vote on the stablecoin bill, as well as a digital assets market structure bill, to take place in the second week of July.