Summary of Article
- The House Financial Services Committee, under Republican leadership, has released a new version of its stablecoin bill.
- The new bill would regulate payment stablecoins and allow state regulators to supervise stablecoin issuers, with federal regulators having a primary role.
- The bill includes the treatment of customer assets and the study on endogenously collateralized stablecoins.
House Financial Services Committee Introduces New Stablecoin Bill
The House Financial Services Committee, under its Republican leadership has dropped a new version of its stablecoin bill after receiving feedback from its Democratic members. The proposed legislation aims to regulate payment stablecoins specifically, allowing state regulators to supervise their issuers, with federal regulators issuing capital and liquidity requirements. The draft also includes other sections such as the treatment of customer assets by firms providing custodial services and the study on endogenously collateralized stablecoins.
Compromise Reached Between Democrats and Republicans
After some bumps in the road between House Democrats and Republicans over the past year regarding how to regulate stablecoins, both parties reached an agreement for this version of the bill. The newer version comes after Chair Patrick McHenry (R-N.C.) and former chair Rep. Maxine Waters (D-Calif.) worked together last year on a previous draft. However, prior to the hearing House Democrats said their Republican counterparts had walked away from negotiations before elections; they also criticized what they saw as a weakening of customer protections and Federal Reserve oversight.
What is Endogenously Collateralized Stablecoins?
Endogenously collateralized stablecoins are any digital asset “in which its originator has represented will be converted, redeemed, or repurchased for a fixed amount of monetary value; and that relies solely on the value of another digital asset created or maintained by the same originator to maintain the fixed price” according to this latest draft bill.