US representative Maxine Waters (D-CA) has Published draft legislation to create a regulatory framework for Stablecoins. The bill is the product of three years of two-year negotiations during the latest congress between water, ranking member and leading Democrat in House Financial Services Committee and the Committee’s former Republican chairman Patrick Mchenry (R-NC).
Waters’ February February of recognition came less than a week after the publication of two Republican led Stablecoin bills, the house StableCoin Transparency and liability for a better principal book economy (stable) law of 2025 and the Senate Guiding and establishing national innovation for us Stablecoins (Genius) law; Released 6 and February 4 respectively.
It also fell – uncertainty – one day before House Financial Services Committee held a hearing with the title “A Golden Age of Digital Assets” to discuss the stable law and other legislation on digital assets.
In his statement, Water’s legislature in the House called for her two -party proposal, suggests that it would be preferable to the other legislation proposed by Republicans from the new (119th) congress session.
“After several years of good faith, the two -party negotiations and cooperation with supervisory authorities and stakeholders, the last congress, the Republican and Democratic Committee jointly paid Stablecoin’s legislation that would create a strong federal framework and set consumer protection front and center,” said Waters.
“This draft Bill promotes innovation, while I am correct to deal with and prioritize anxiety that I have long had to protect our nations consumers from fraud that has tormented the crypto industry.”
In mid -2023, the Financial Service Committee approved one previous version of the bill Called Clarity for Payment Stablecoins ACT, much to dissatisfaction with water. Therefore, negotiations continued last year to support a full house vote, resulting in the payment Stabecoin counting Published by Waters on February 10.
“I am convinced that the legislation that I have revealed today provides the best foundation for going ahead and getting urgent necessary Stablecoin’s legislation signed by law,” Waters said.
The details
In the case of the bill itself, its most important provisions include:
- Create a regulatory framework for both the “Depository Institution Stablecoin issuers” and non -bank Stablecoin issuers, with a central role for the Federal Reserve;
- Strong reserve requirements;
- Expose issuers to sanction laws and requires that Anti-money wash and Laws on the financing of terrorists;
- Closing loopholes that would allow StableCoin —Emitters like Tether to bypass US law abroad;
- Robust protection for the consumer Walletsincluding risk management and financial resource requirements;
- And protect the existing authority and monitoring of the Treasury, Consumer Agency for Economic Protection (Cfpb), Securities and exchange committees (Sec) and Raw development commission (CTFC) About certain activities at StableCoin players, including issuers, wallet suppliers, brokers dealers, exchanges that facilitate Stablecoins trading and other intermediaries that maintain liquidity for payment stables.
This last provision is a remarkable separation point from Recently stable team discussion draftwhich explicitly included a change of amendment to clarify that “payment stablecoins are not securities”, thus removing them from SEC’s potential jurisdiction.
Under Former Sec -Chairman Gary Gensler, there was a proposal that some payment stablecoins may fall under the definition of “security” (based on Howey test) and be the subject of Sec’s supervision. This was clear from the agency 2023 (and ongoing) The pursuit of binance for the offer and sale of BUSD Stablecoin tokens.
Water’s behalf would leave the SEC open to persecute Stablecoins as it was regarded as securities, while Hill and Steil’s behalf would remove Stablecoins entirely from the SEC’s view.
But perhaps the most important difference between Waters payment Stablecoin counting – formal Clarity for Payment Stablecoins ACT from 2023 – and the stable law is the role of Federal Reserve, or a lack of it in the latter case.
Where the two bills deviate
The largest contrast area between the competing bills is, which the federal agency is delegated the primary supervisory authority for Stablecoins and issuers.
Waters’ Bill gives the Federal Reserve a much bigger role, while Hill and Steil’s Republican draft do The office for the foreign exchange office (OCC) – A federal agency that regulates and monitors national banks and federal savings associations – the supervisory authority for non -bank Stablecoins. The stable law gives the Federal Reserve a very limited role in intervening in previous circumstances, but with five days’ notice.
This dispute may not be as clearly divided party lines as in the second congress chamber, GeniusPublished by the Senate Republican Bill Hagerty (R-TN) on February 4, a proposal made more in line with Waters Bill, where some Stablecoin issuers would fall under the Federal Reserve System’s regulations.
Outside this nuclear sticks, the other main differences of Waters StableCoin count are its proposal to ban certain convicted individuals, such as FTX’s Sam Banke-FriedFrom serving as the CEO or checking more than 5% of the shares in an issuer and a mandate prohibiting “non-financial commercial companies”, such as large technology companies, to own a Stablecoin Issue.
While some of these most important differences are significant, mainly the question is about where the ultimate supervisory authority over the Stablecoin space will be located, the different bills have very common, with rope. House Financial Services Committee President, Patrick Mchenry, to provide several legislative routes for payment publishers in the United States.
A convicted bill?
However, much of this conversation can be part, as the Republican led stable act is much more likely to be approved by the Republican majority house.
On top of the fact that Hill is the chairman of financial services and Steil is chairman of the shiny new digital assets, financial technology and sub -committee for artificial intelligence, Republicans have a majority of 218 to 215 in the chamber.
In the House of Representatives, most bills require a simple majority (more than 50%) to get a complete vote. Since the house has 435 voice members, this usually means at least 218 votes, provided that all members are present and vote.
In other words, provided that all party members fall in line, Republicans do not need support from water and her democratic colleagues to approve their Stablecoin bill. In addition, both the stable law and Genius Act already have a certain limited two -party support.
Hill and Steil were still able to decide to integrate proposals from Waters Stablecoin account into their own stable action during the debate and finesse. However, it is a sad fact that due to the latest temperature in party politics in the United States, a party with a working majority in Congress – in this case the Republicans – is less likely to be open to proposals from their colleagues over the hallway.
Time is also a factor, and more debate, feedback, input and audit means more time spent without Stablecoin legislation on the books in the United States. Freganed operations early in the new congress to abolish Stablecoin bills indicate a clear intention from Capitol Hill to prioritize legislation in this area and receive a bill “On the president’s desk” this year.
Watch: Blockchain is much more than digital assets
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