Crypto-friendly Sen. Bill Hagerty has introduced a draft bill to create a regulatory framework for stablecoins, a move that could reshape the entire crypto industry.
The Tennessee Republican’s proposal is part of the Payment Clarity Stablecoin Act, currently being considered in the House by Rep. Patrick McHenry (R.N.C.) and Rep. Maxine Waters (D-Calif.) resemble. In a statement Thursday, Hagerty said his draft plan aims to bring much-needed clarity to stablecoin regulation.
Hagerty, a member of the Senate Banking Committee, organized a draft bill that would split up federal oversight of stablecoins. Under the proposal, the Federal Reserve would oversee banks, while the Office of the Comptroller of the Currency (OCC) would regulate non-bank issuers. Additionally, the draft proposal includes provisions that would allow stablecoin issuers with more than $10 billion in assets to be exempt from federal oversight and remain under state regulation. The law also mandates that stablecoins be backed 1:1 by reserves held in U.S. currency.
In a statement, Sen. Hagerty highlighted the potential benefits of stablecoins, noting that they could strengthen payment systems and create new demand for U.S. Treasuries. He expressed concern that the lack of clear regulatory guidelines is hindering the growth and adoption of stablecoins.
Negotiations to pass the stablecoin bill are continuing in both houses of Congress. In the House of Representatives, Mr. McHenry and Mr. Waters have been working on a stablecoin payment transparency bill since 2022. The bill advanced out of a Republican-led committee but faced hurdles to gaining broader support. One of the main points of contention was a provision that would allow state regulators to approve the issuance of stablecoins without involving the Federal Reserve.
Industry reaction to this bill
Cody Carbone, president of the Digital Chamber, reacted to the publication of Hagerty’s draft, saying it has galvanized the debate around stablecoin regulation. Carbone noted that the push for a stablecoin regulatory framework is bipartisan.
We applaud @SenatorHagerty for introducing the Senate's Clarity for Payment Stablecoins Act discussion draft, providing needed regulatory certainty for USD stablecoins. It's time to unlock stablecoins' potential in a safe, predictable environment.
Read more:… pic.twitter.com/f7Z6oactag
— The Digital Chamber (@DigitalChamber) October 10, 2024
Ron Hammond, director of government relations at the Blockchain Association, called Hagerty’s draft “an important development.” He referenced comments from Representatives McHenry and Waters who indicated their intention to move forward with stablecoin legislation. Hammond also said Sen. Hagerty’s efforts could serve as a starting point for discussion in the Senate Banking Committee.
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Lawrence does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu Cryptocurrency Project. Readers are encouraged to conduct their own research and consult a qualified financial advisor before making any investment decisions.
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