A bipartisan pair of House legislators said on July 17 they expect legislation to be filed by the end of this month to regulate “stablecoin” cryptocurrencies.
Stablecoins are cryptocurrencies whose value is tied to currencies, commodities, or other financial instruments.
Reps. French Hill, R-Ark., and Jim Himes, D-Conn., both members of the House Financial Services Committee members, discussed the coming legislative efforts during an online event with the Atlantic Council on July 17.
“We hope to try to bring both those two concept bills to the House Financial Services Committee and to the House Agriculture Committee in the case of the framework bill, before the end of July,” stated Rep. Hill.
Rep. Hill’s office said last month that his Digital Asset Market Structure Discussion Draft would provide the Commodity Futures Trading Commission with authority to oversee digital commodities while defining the Securities and Exchange Commission’s jurisdiction with assets that are part of an investment contract. The framework would also impose consumer protections affecting firms registered with the agencies, his office said.
“In the last 18 months, we saw the obliteration of $2 trillion in value in the broader digital assets sphere,” said Rep. Himes. “People have experienced pain and bad things like FTX, but we need to make sure that wherever this thing goes, it does so in a way that is sort of safe and predictable and transparent for users of the system.”
One of the legislative discussion drafts now circulating would set up guardrails to allow for stablecoins to be regulated at the Federal and state levels, and would also deal with regulation of trading platforms.
“We try to define first and foremost what is stable, how is it defined,” said Rep. Hill of the proposed legislation. “They have to have an audit, they have to have exposure of their liquidity. This is something that’s not the case in stablecoins today … those are our high Federal standards,” he said.
Both House members also agreed on the need for robust cryptocurrency legislation in order to maintain a step ahead of foreign competition, and establish the U.S. in a leadership position in cryptocurrency markets.
“We don’t want to put ourselves at a disadvantage there, so we need to have those initial fundamental steps to try to get this right so that we’re competitive and we don’t disadvantage our country and our innovators and that we attract our share of that capital,” said Rep. Hill.