Bill Regarding U.S. Stablecoins Pushed Back to September, According to Reports
The progress of the U.S. stablecoin bill is currently under scrutiny, with differing views between Republicans and Democrats on stablecoin regulation causing potential delays.
The bill, which is expected to prevent commercial entities from acting as issuers of stablecoins, is also likely to introduce stringent liquidity and capital requirements. However, these conditions have raised concerns among some stakeholders, including the Independent Community Bankers of America (ICBA), who argue that such regulations could stifle innovation and limit community banks' ability to participate in stablecoin activities.
The Treasury has emphasised the need for customer assets to be segregated by wallet providers, while Secretary Janet Yellen has expressed concerns over the bill's handling of digital assets held in custody on behalf of consumers.
The House Financial Services Committee (HFSC) is considering releasing the bill's discussion draft soon, but the committee vote has been delayed due to a lack of agreement between HFSC Chairwoman Maxine Waters (D., Calif.) and Patrick McHenry (R., N.C.).
In addition, the ICBA has requested a delay in the U.S. stablecoin bill's consideration to seek comments from bankers and stakeholders. This request could impact the timeline of the bill's consideration, with sources reporting that the bipartisan U.S. stablecoin bill may be delayed until September.
One of the key points of contention is the regulation of stablecoins. While Democrats advocate for federal protection of customer funds from crypto platforms' assets in insolvency instances, Republicans support state-level wallet standards. This difference in stance could further complicate the bill's progress.
Nellie Liang, Treasury undersecretary for domestic finance, stated that stablecoins backed by high-quality assets can form a payment system's building block, but those with questionable asset reserves create risk. The bill may allow nonbank firms to issue stablecoins under Federal Reserve's oversight, provided they adhere to fresh liquidity and capital standards.
As the U.S. stablecoin bill continues to navigate through the complexities of regulation, it remains to be seen how these debates will shape the final legislation and the future of stablecoins in the United States.
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