Reserve

Tether USDt

BUSD

Wednesday

<div class="textg" style="text-align: justify; font-weight: lighter; line-height: 1.3em; font-size: 15px; border-radius: 3px; color: #80909a; padding: 10px; background-color: #F4F6F9; margin-bottom: 15px;">
 Neither the author, Ruholamin Haqshanas, nor this website, The Tokenist, provide financial advice. Please consult our&nbsp;<a href="https://tokenist.com/terms-of-service/" style="text-decoration:underline;color:#3c7b7b" target="_blank" rel="noreferrer noopener" class="deco-link">website policy</a>&nbsp;prior to making financial decisions.
</div> 
<p class="has-drop-cap">The US House Financial Services Committee has released a draft of a new crypto regulation focused on stablecoins. The 73-page&nbsp;<a href="https://docs.house.gov/meetings/BA/BA21/20230419/115753/BILLS-118pih-Toproviderequirementsforpaymentstablecoinissuersresearchonadigitaldollarandforotherpurposes.pdf" target="_blank" rel="noreferrer noopener nofollow" class="deco-link">draft bill</a>&nbsp;would require stablecoin providers to fully back their digital assets with reserve assets on “at least one-to-one basis.”&nbsp;</p> 
<h3 id="new-bill-mandates-stablecoins-be-fully-backed-by-reserves">New Bill Mandates Stablecoins be Fully Backed by Reserves</h3> 
<p>Over the weekend, the House published a new crypto-related bill seeking a clearer ruling on stablecoins. The bill, which comes after the catastrophic collapse of Terra’s algorithmic stablecoin, would require stablecoin providers to maintain reserves backing their coins on an “at least one-to-one basis.”&nbsp;</p> 
<p>The reserves could be made of US dollars, central bank reserve deposits, Treasury bills with a maturity of 90 days or less, and repurchase agreements with a maturity of seven days or less backed by Treasury bills with the same maturity.</p> 
<p>The bill also seeks to task the Federal Reserve with approving and regulating non-bank companies that currently issue or want to issue their stablecoins. Circle and Tether are some examples of non-bank companies that currently have their stablecoins.&nbsp;</p> 
<p>On the other hand, banks that want to issue their own stablecoins need approval from their main financial regulator, which could be the National Credit Union Administration, Federal Deposit Insurance, or Office of the Comptroller of the Currency.&nbsp;</p> 
<p>Furthermore, any stablecoin provider that wants to do business in the US, regardless of where the company is based, would need to register. Those who fail to register could face up to five years in prison and a $1 million fine.&nbsp;</p> 
<p>The new draft bill&nbsp;<a href="https://tokenist.com/house-bill-might-place-a-two-year-ban-on-luna-like-stablecoins/" rel="dofollow" class="deco-link">proposes a two-year ban</a>&nbsp;on “endogenously collateralized stablecoins.” These are defined as stablecoins “in which its originator has represented will be converted, redeemed, or repurchased for a fixed amount of monetary value” and “relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price.”</p> 
<p>The bill comes as a House Financial Services subcommittee will hold a hearing on stablecoins on Wednesday in a session titled: “Understanding Stablecoin’s Role in Payments and the Need for Legislation.”&nbsp;</p> 
<p>The hearing will feature some prominent figures from the crypto world, including Dante Disparte from Circle Internet Financial, the Blockchain Association’s Jake Chervinsky, Columbia Professor Austin Campbell, and New York Department of Financial Services Superintendent Adrienne Harris.</p> 
<div class="cta-referral"> 
 <img src="https://tokenist.com/wp-content/themes/thetokenist/assets/img/del/cta-referral-1.png" alt="" class="cta-referral__img" loading="lazy" decoding="async"> 
 <div class="cta-referral__text"> 
  <p>Join our&nbsp;<a href="https://t.me/thetokenist" target="_blank" rel="noreferrer noopener nofollow">Telegram group</a>&nbsp;and never miss a breaking digital asset story.</p> 
 </div> 
</div> 
<h3 id="us-authorities-ramp-up-regulatory-efforts">US Authorities Ramp Up Regulatory Efforts</h3> 
<p>The new stablecoin draft bill comes as US officials have been increasingly going after crypto firms following the 2022 crypto meltdown. The SEC, in particular, has been cracking down on digital asset companies.</p> 
<p>For one, the commission has&nbsp;<a href="https://tokenist.com/paxos-strongly-disagrees-with-sec-on-busd-willing-to-vigorously-litigate/" rel="dofollow" class="deco-link">threatened Paxos</a>, a US-registered firm that issues Binance’s stablecoin Binance USD (BUSD), with legal action due to its issuance of BUSD tokens. The agency argued that BUSD is considered an unregistered security.</p> 
<p>More recently, the SEC also&nbsp;<a href="https://tokenist.com/coinbase-shares-fall-11-in-premarket-as-sec-action-looms/" rel="dofollow" class="deco-link">sent</a>&nbsp;a “Wells notice” to Coinbase, the largest crypto exchange in the US, threatening the platform with legal actions regarding some of its listed digital assets, its staking service Coinbase Earn, Coinbase Prime, and Coinbase Wallet.&nbsp;</p> 
<p>Notably, the new draft bill by the House echoes similar legislation <a href="https://tokenist.com/new-draft-bill-mandates-stablecoins-be-100-backed-by-reserves/" rel="dofollow" class="deco-link">introduced</a>&nbsp;by former Senator Pat Toomey in 2022. At the time, the US Congressman said that non-bank issuers must maintain all reserves in assets deemed appropriate by the Office of the Comptroller of the Currency (OCC).</p> 
<div class="cta-sub js__cta-sub"> 
 <div class="cta-sub__start" data-step="1"> 
  <div class="cta-sub__title">
   <strong>Finance is changing.</strong>
  </div> 
  <div class="cta-sub__subtitle">
   Learn how, with Five Minute Finance.
  </div> 
  <div class="cta-sub__excerpt">
   A weekly newsletter that covers the big trends in FinTech and Decentralized Finance.
  </div> <button type="button" class="btn">Try it out (for free)</button> 
 </div> 
 <div class="cta-sub__form" data-step="2" style="display: none;"> 
  <script type="text/javascript" src="https://app.getresponse.com/view_webform_v2.js?u=QcLhh&amp;webforms_id=hpcwd"></script> 
 </div> 
 <div class="cta-sub__result" data-step="3" style="display: none;"> 
  <div class="cta-sub__title">
   Awesome
  </div> 
  <div class="cta-sub__caption">
   You’ve subscribed.
  </div> 
  <div class="cta-sub__greeting">
   You’re well on your way to being in the know.
  </div> 
 </div> 
</div> 
<p><strong><em>Do you think the draft bill could further drive the adoption of stablecoins and cryptocurrencies? Let us know in the comments below.&nbsp;</em></strong></p> 
<p>The post <a rel="nofollow" href="https://tokenist.com/u-s-house-financial-services-committee-unveils-draft-stablecoin-legislation-key-insights/">U.S. House Financial Services Committee Unveils Draft Stablecoin Legislation: Key Insights</a> appeared first on <a rel="nofollow" href="https://tokenist.com">Tokenist</a>.</p>

U.S. House Financial Services Committee Unveils Draft Stablecoin Legislation: Key Insights

Table of Contents

Tokenist

Other articles published on Apr 17, 2023

Q1 2023 Global Web3 Security Report

Crypto Clash: Congressman Aims to Fire SEC Boss Gensler as Ripple-SEC Legal Battle Heats Up and G...

Nike’s .Swoosh To Get Its First “Our Force 1” Airdrop on April 18th

5 Best Coins for Staking in 2023

BTC and ETH Kick off Slowly as BNB and SOL Recover

Coinbase Says UK is “Web3 Innovation Hub” After Doubting DeFi Future In US

Join our free newsletter for daily crypto updates!