Stablecoin Rules Discussed in Financial Services Hearing

• The US Financial Services Committee held a hearing to discuss two different regulatory proposals on stablecoins.
• The Republican version aims to allow state regulators more jurisdiction over stablecoin rules whereas the Democrat bill proposes full authority exclusively to federal regulators.
• Both bills lay out rule proposals for requirements on liquidity, transparency, and reserves for stablecoin issuers.

Stablecoin Hearing Held by Financial Services Committee

The US Financial Services Committee held a hearing on Thursday to discuss dueling partisan regulatory proposals for stablecoins. This hearing was an attempt to establish clarity on the fast-moving technology and asset class.

Republican Proposal

The first proposal was from Republican French Hill which aimed to give state regulators more jurisdiction over stablecoin rules. This would include requirements on liquidity, transparency, and reserves for stablecoin issuers. Hill argued that without congressional action, offshore and opaque projects would continue to thrive while leaving consumers vulnerable due to lack of US oversight.

Democrat Proposal

The second proposal comes from Ranking Member Maxine Waters which seeks to grant full authority exclusively to federal regulators when it comes to regulating stablecoins. This proposal also outlines rule requirements regarding liquidity, transparency, and reserves for issuers of these coins in order protect consumer safety.

Agreement is Critical

Both sides noted that coming to an agreement is critical in allowing the industry to flourish safely in the US rather than going overseas where regulations are less restrictive or nonexistent. Without such agreement, there will be little incentive for companies dealing with these tokens not seek opportunities elsewhere as they lack assurance of regulatory compliance at home.

Conclusion

Ultimately, both parties recognize that action needs be taken soon if any progress is going made in terms of regulation surrounding stablecoins so that they can become firmly established within the US market without compromising consumer protection standards set forth by either side’s proposed bills.