House Financial Services Committee approves bill to regulate stablecoins

What’s new? The US House Financial Services Committee has approved a bill to regulate stablecoins called the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) with 32 votes in favor and 17 against. Committee Chairman French Hill, a Republican from Arkansas, emphasized during the hearing that regulation of this area is vital for “global competitiveness.”

Material by The Block

What else is known?

“Blockchain technology continues to transform the way money moves. The fact is, policymakers, regulators and law enforcement must keep up with these changes,” Hill said.

Hill, along with colleague Bryan Steil, a Wisconsin Republican, introduced the bill last week. It targets stablecoins dollar-pegged and contains reserve and capital requirements for issuers.

Among other things, the document requires companies to maintain reserves equal to the amount of coins issued and comply with anti-money laundering (AML) standards.

This is not the first attempt by a House Committee to advance a bill to regulate stablecoins. In 2023, a similar document successfully passed a specialized committee hearing, but further progress was complicated by Republicans’ conflict with Joe Biden’s administration.

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A separate stablecoin bill, known as Guiding and Establishing National Innovation for US Stablecoin (GENIUS), has also been introduced in the Senate. Both houses of Congress will need to come to a consensus, as the documents have differences in their approaches to regulating domestic and foreign issuers.

For example, STABLE allows foreign issuers such as Tether to offer their assets on US exchanges, while GENIUS prohibits foreign issuance in the United States but allows stablecoins issued abroad to circulate on the secondary market in the US.

The Senate version also includes language authorizing the Treasury Department to take action against foreign issuers. The Senate Banking Committee approved its version of the bill in March.

A recent House hearing also debated whether the legislation should allow for interest payments on stablecoins. CEO of the leading US crypto exchange, Coinbase, Brian Armstrong, on the eve insisted that such a possibility should be taken into account in the document.

Earlier, it was reported that Donald Trump expressed his desire to sign the bills on the structure of the market and stablecoins as soon as possible.