Initially, it was said that on Wednesday, the House Financial Services Committee would release a bipartisan draft of stablecoin regulations (27th). The proposal, however, won’t be reassessed until September at the earliest because of unsolved fundamental issues and mediation with MPs, according to sources familiar with the situation.
According to The House Financial Services Committee’s draft stablecoin regulation could be made public on July 27 as The Motion District revealed last week. Future stablecoin issuers might have to comply with bank-type regulations and hold reserves, and gold must be backed by conservative assets like US dollars and US Treasury bonds.
Members of the House of Representatives will postpone consideration of the bipartisan draft stablecoin regulation, The Wall Street Journal reported today (26), citing persons familiar with the situation. At the earliest, they will revisit in September. According to people familiar with the situation, the Financial Services Committee Chair Maxine Waters and the panel’s top Republican, Patrick McHenry, do not appear to have finished their good offices with pertinent lawmakers before the draft is taken into consideration. The bill was scheduled for an initial committee vote on 7/27. Additionally, the bill doesn’t address several crucial problems.
Officials Are Concerned That the Bill May Lead to Stablecoin Runs
Another person with knowledge of the situation said that although Treasury Secretary Janet Yellen welcomed the committee’s continuous work, it did not seem to want to make a decision so quickly, and the White House has not made any public comments on the draft. He claimed that those decision-makers were worried:
- If there is any doubt about the ability of stablecoins to continue to be exchanged for fiat currency at a one-to-one ratio, stablecoins may be vulnerable to large-scale withdrawals by investors. That could force stablecoin issuers to scramble to liquidate their reserves, putting downward pressure on asset prices and potentially damaging broader financial markets.
Separately, some bankers and policymakers expressed concern over the draft stablecoin. They all urged Waters to postpone discussion of the bill on Friday, citing the need for feedback from bankers and other stakeholders.
Cryptocurrency regulation by the SEC will be a “horror,” according to Mark Cuban
More recently, there has also been discussion of broader cryptocurrency regulation in addition to stablecoins. The U.S. Department of Justice said this week that two of the three suspects were detained in Seattle and that one of them, former Coinbase manager Ishan Wahi, was charged with wire fraud in June 2021.
Senator Pat Toomey tweeted earlier encouraging the SEC to actively enhance the integrity and clarity of the relevant regulatory bill in relation to the incident.
The SEC’s approach to enforcement regulation of digital assets poses a serious challenge to any well-intentioned innovator striving to comply with existing regulations.
The (SEC) should provide regulatory clarity before enforcement, which will benefit both regulators and investors.
Let me be clear: Any violation of the law should certainly be prosecuted.
— Senator Pat Toomey (@SenToomey) July 22, 2022
The owner of the NBA Dallas Mavericks, Mark Cuban, who has long been bullish on the future of cryptocurrencies, also reacted to Toomey’s remarks by claiming that the SEC’s regulation of cryptocurrencies may be a nightmare in the real world.
Wait until you see what method they (SEC) come up with to do token registration. This is the nightmare facing the cryptocurrency industry.
You still want to hire thousands of lawyers and create all kinds of reasons for more people to pay taxes?
Think this is bad? Wait till you see what they come up with for registration of tokens. That's the nightmare that's waiting for the crypto industry. How else do you keep thousands of lawyers employed and create reasons to ask for more taxpayer money? https://t.co/eoDAiyDxlR https://t.co/mjr9LxnDZB
— Mark Cuban (@mcuban) July 23, 2022
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