- A U.S. House Committee has introduced a new bill that seeks to ban certain stablecoins for two years.
- The bill is aimed at restricting stablecoins that are backed by crypto assets rather than fiat currency.
- If passed, the bill would be followed by an extensive study of such stablecoins by the U.S. Treasury Department.
The United States House Financial Services Committee recently unveiled a new bill that seeks to enforce a two-year ban on certain stablecoins. The bill would also pave the way for U.S. agencies, including the Department of Treasury and Federal Banking regulators, to have a more hands-on approach to overseeing such crypto assets.
According to a recent report, the bill was made public for the first time on April 15, 2023, on the House committee’s hearing page. However, the bill has been circulating among lawmakers of both parties since as early as the fall of 2022. It is believed to be the first comprehensive proposed law for payment stablecoins to make an appearance in Congress.
The bill specifically targeted what it described as “endogenously collateralized” stablecoins, in other words, stablecoins that are backed by other crypto assets rather than fiat currency. If passed, the new law would see a two-year ban placed on such stablecoins, in addition to legal trouble for the firms that issue them.
The House Financial Services Committee will reportedly meet later this week to discuss payment stablecoins and legislation surrounding this space. If passed, the bill would enable the U.S. Treasury Department to carry out extensive research on the concerned stablecoins and submit a report of its findings to the House Committee within one year of the bill’s conversion to law.
Industry leaders, including Jeremy Allaire, the CEO of USD Coin issuer Circle, have voiced their concerns about this bill. “While comprehensive, there are clearly open and challenging issues with the bill as proposed, and now is the time for our country and political leaders to really dig in and get this right. The role of the dollar in the world is at stake,” Allaire tweeted.
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