New Stablecoin Bill Could Be Introduced In Senate This Week

On April 9, Senator Kirsten Gillibrand (D-N.Y.) announced at the Bitcoin Policy Summit at the National Press Club in Washington that while negotiations are still ongoing, she expects to introduce new stablecoin legislation later this week or next week with Senator Cynthia Lummis (R-Wyo.). Gillibrand described that with the goal in mind of “unlocking the potential of crypto and the original aim of bitcoin as a means of payment. We worked with the Fed, Treasury and the New York State Department of Financial Services to allow nondepository institutions to issue stablecoins while promoting safety and soundness within the industry.”

Lummis, a member of the Senate Banking Committee, and Gillibrand, a member of the Senate Agriculture Committee, reintroduced the Lummis-Gillibrand Responsible Financial Innovation Act last year to create a comprehensive regulatory framework for all crypto assets. In terms of new standalone stablecoin legislation, Gillibrand said, “We’re making sure that state and federal regulators have the oversight authority to weed out bad actors while still promoting growth and innovation. And we’re requiring that all issuers make sure that the reserves are back to one-to-one.”

Most importantly, she explained how this legislation develops two paths for stablecoin issuers. The first path would be for depository institutions that would allow for both federal and state bank charter depository institutions to become stablecoin issuers after an approval process. The other path would be for nondepository institutions that would give the federal government supervisory authority over the state nonbank institutions while preserving states as the primary functional regulator.

“The bill is a product of common sense compromise. It balances the interests of federal, state and industry stakeholders. It will help drive innovation in the cryptocurrency landscape,” Gillibrand said. Negotiations are still taking place and everyone has to continue to work collaboratively to get this signed into law, she added. Finally, Gillibrand described her belief that stablecoins are a foundational regulatory step to unlocking the full potential of crypto assets like bitcoin.

One of the takeaways from the negotiations that Gillibrand said she learned was how this legislation needed more bipartisan and more bicameral support. She addressed how the negotiations included chairman Patrick McHenry (R-N.C.) and ranking member Maxine Waters (D-Calif.) of the House Financial Services Committee. McHenry also spoke at the Bitcoin Policy Summit and similarly echoed that stablecoins would be an important first step in forging broader U.S. crypto laws.