Former CFTC chief urges US Congress to pass a stablecoins law

The stablecoins bill — a vital update for the U.S. financial system. In an op-ed on CoinDesk, Circle’s chief legal officer and former head of the CFTC, Hit Tarbert, urged its passage.

The top executive drew a parallel between кризисом 2007–2008 годов and the current state of digital currencies. He noted that, just as the Dodd-Frank Act strengthened the financial system at the time, similar steps are needed today to regulate ‘stablecoins’.

According to Tarbert, stablecoins have the potential to modernise the financial system, strengthen the U.S. dollar and increase the efficiency of transactions for both businesses and consumers.

The expert emphasised that these benefits can only be realised if legislation aimed at financial stability and consumer protection is enacted.

Tarbert described payment stablecoins as an increasingly important element in modern transactions, including trade, money transfers and humanitarian aid.

He noted that the growing adoption of ‘stablecoins’ demonstrates their practical usefulness, as they enable fast and cost-efficient payments worldwide.

The Circle’s chief legal officer said that stablecoins can reduce transaction costs. He compared the high fees and delays associated with traditional bank transfers to the speed and low cost of sending ‘stablecoins’.

Tarbert pointed to growing Congressional understanding of the importance of regulating digital assets. He cited the Закон о прозрачности платежей стейблкоинов, approved by the House Financial Services Committee.

The expert listed several provisions that, in his view, should be part of the regulatory framework for ‘stablecoins’, including risk management, asset-reserve requirements, and standards of transparency and reporting.

Tarbert warned of potential risks associated with unregulated stablecoins. He noted that a collapse of a global ‘stablecoin’ without adequate backing could seriously affect both U.S. markets and the economy at large.

The executive recalled similar statements by Finance Minister Janet Yellen and the Presidential Working Group on Capital Markets regarding the need for legislation on ‘stablecoins’.

The expert touched on international implications of failing to regulate stablecoins. He noted that China and Russia are actively developing CBDC, which could challenge the status of the U.S. dollar as the world’s reserve currency.

In Tarbert’s view, passing legislation on ‘stablecoins’ could set standards for consumer protection, bolster financial resilience and sustain the dollar’s global dominance.

Earlier, a member of the Fed’s board, Michelle Bowman, questioned the prudence of launching a digital dollar. She pointed to the FedNow payments system, as an alternative to a CBDC. She also highlighted the risks of stablecoins for the U.S. banking system and consumers.

In August, a group of congressmen accused the Fed of creating barriers to banks issuing stablecoins.

In September Tarbert backed Binance on the status of BUSD. On June 5, SEC filed suit against the platform, alleging 13 counts, including the sale of unregistered securities, including BNB and BUSD.