A potential landmark stablecoin bill has been released by the U.S. House Financial Committee Services, marking the first significant crypto legislation to emerge in 2023. According to the proposed stablecoin bill, there would be a temporary ban on stablecoins that have their value pegged to other cryptocurrencies, as well as a request for a study on a central bank digital currency (CBDC). This proposal follows two notable incidents involving stablecoins in the last year: the collapse of terraUSD (UST), which was supported by the token LUNA, and also the temporary disconnection of (USDC) USD coin from its $1 peg, media reports said.
The bill seeks to create descriptions for stablecoin issuers, similar to the term used in a bill introduced by ex Senator Pat Toomey (R-Pa.) in 2022. The bill suggests that a halt on stablecoins, such as UST, backed by other cryptocurrencies would continue until further studies are conducted. In addition, the legislation also mandates a thorough analysis of the potential consequences of a Central Bank Digital Currency (CBDC) issued by the Federal Reserve.
Punchbowl News first reported the bill’s publication, and a subcommittee under the House Financial Services will conduct a hearing on stablecoins on Wednesday, having representatives from Circle Internet Financial, the Blockchain Association, Columbia University, and the New York Department of Financial Services. The scheduled hearing is set to follow a meeting of the complete Financial Services Committee, which will convene to hear testimony from Gary Gensler, the Chair of the Securities and Exchange Commission, the day prior.
According to a spokesperson for Rep. Patrick McHenry (R-N.C.), the chair of the committee, the bill has been spreading among lawmakers since last downfall but had yet to be shared with the people. The proposed legislation has significant implications for stablecoin issuers and the crypto industry as a whole, as it represents the first major step towards regulating the sector in 2023.
Stablecoins have come under increased scrutiny in recent years as concerns over their potential to disrupt traditional financial systems have grown. The proposed stablecoin bill could provide clarity and regulation for the stablecoin market and carve the way for adopting digital currencies by central banks in the future. The crypto industry will be closely monitoring the bill’s progress, which could have significant implications for the sector’s future.
