US Congress criticises bill to regulate stablecoins

The US House of Representatives Financial Services Committee held the first hearing of 2023 on a bipartisan bill to regulate the activities of stablecoin issuers.

The document was criticised for outdated data in its preparation, and there was a push to update the information ahead of the next hearing for further discussion.

“This matters to us at international and national levels. It is crucial that we have a bipartisan understanding of the usefulness and importance of this legislation”, said Patrick McHenry, chairman of the committee.

He was one of the authors of the document alongside colleague Maxine Waters. In October 2022 McHenry warned of ‘difficult debates’ regarding the bill on stablecoins.

“The US is the only among the world’s largest jurisdictions without a federal payments charter. We need to level the playing field between the US and the rest of the world. Banks and other institutions in the US need regulated pathways to issue stablecoins”, said Dante Disparte, Circle’s director of strategy.

At the hearing in Congress was also Jake Chervinsky, head of Digital Asset Policy at the Blockchain Association.

“Our financial system has a problem: it’s stuck in the analog era, constrained by intermediaries who act as gatekeepers and middlemen to outdated infrastructure that has failed to keep up with the digital age”, he wrote an hour before the start.

Our financial system has a problem: it’s stuck in the analog era, constrained by intermediaries who act as gatekeepers and middlemen to outdated infrastructure that has failed to keep up with the digital age.

Today, I’ll tell Congress how public blockchains are the solution. pic.twitter.com/AQgYa9YtlL

— Jake Chervinsky (@jchervinsky) April 19, 2023

The bipartisan bill was introduced in Congress on April 16. Its deliberations will continue. The document provides that the Fed will oversee the activities of centralized stablecoin issuers such as USDC and USDT.

The regulator will issue licenses for such activity. Those wishing to issue their own ‘stablecoins’ will have to obtain approval in their jurisdictions.

Back in April 2023, Stellar’s head Denelle Dixon urged regulation of stablecoins to bolster the dollar.