Congressional Action on Stablecoins Could Come as Soon as This Month, Source Says

The ongoing conflict in Ukraine could impede progress on the bills


Source: Shutterstock


key takeaways

  • Efforts are underway in the House and the Senate to regulate stablecoin issuers and oversee reserves
  • The escalating conflict in Ukraine has led lawmakers to question how a CBDC might work in the US

As stablecoins and their reserves have been increasingly scrutinized, bills designed to regulate the digital assets will likely be introduced by US lawmakers this month, according to a source familiar with the matter.

Different versions of the bill are expected to be rolled out in the House and Senate this month, the person said. The source was granted anonymity to discuss private information.

Both the House and Senate heard from Jean Nellie Liang, the under secretary for domestic finance at the Department of the Treasury, in February to discuss a recent report on stablecoins from the President’s Working Group on Financial Markets (PWG).

The PWG and Liang recommended that stablecoin issuers must be federally insured depository institutions — more commonly known as banks. More Democrats are starting to disagree with the guidance, the person said, but the upcoming bills, some of which will be bipartisan efforts, will center around creating rules for stablecoin reserves.

“There seems to be a bipartisan consensus that Congressmen want to prevent another situation like Tether, the stablecoin known as USDT that has been subject to enforcement actions and scrutiny from regulators for holding only a small portion of its reserves in US dollars,” said Ron Hammond, director of government affairs for the Blockchain Association. “The bills may include measures requiring stablecoin issuer audits and clearer guidelines about what assets can make up reserves and whether banks or nonbanks can issue stablecoins.”

The move comes after Rep. Josh Gottheimer, D-N.J.,revealed in February an early draft of legislation aiming to classify certain stablecoins as “qualified” if consumers can redeem the digital currency on a one-for-one basis with US dollars.

Recent concerns over Russia’s central bank digital currency (CBDC), which is currently in pilot, and Canada’s freezing of crypto addresses have lawmakers rethinking the risks associated with a US CBDC, the person added. It’s not the first time lawmakers have questioned the role a CBDC might play in the current financial landscape.

In January, during Federal Reserve Chair Jerome Powell’s testimony before the Senate Banking Committee, Sen. Pat Toomey, R-Pa., questioned whether a Fed digital dollar would be able to exist alongside a “well-regulated, privately issued stablecoin.” Powell, who previously argued that a CBDC would render private stablecoins obsolete, assured Toomey the two are not mutually exclusive.

While efforts to draft bills related to stablecoins have been in the works for some time, the escalating situation in Ukraine may delay future progress. One lawmaker’s office has already put their stablecoin work on hold, the person said.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

MON - WED, MARCH 18 - 20, 2024

Digital Asset Summit (DAS) is returning March 2024. What you can expect: And more! Don’t miss out on the opportunity to be in the room when the future of crypto is decided. Join us and help shape the future of our […]

recent research

Research report - cover graphics-2.jpg


Base has doubled-down on its commitment to the Superchain vision, has shown early signs of success with nearly $400M in TVL, and has become home to novel dapps such as which has seen significant traction.


The SEC, in a Friday court filing, said it reserves its right to object to the plan from Celsius


Largely unnoticed until Monday, stakeholder Justin Sun confirmed a $8 million hack in a tweet


Crypto is that perfect edge for candidates to use to gain votes and campaign dollars


Coinbase can offer crypto custody, crypto buying and selling and crypto trading as part of the registration


The latest industry scandal has rattled Hong Kong’s ambition to become a global crypto hub as its main financial regulator ramps up measures designed to protect investors


Coinbase holds about 5% of the total bitcoin in circulation, according to on-chain analytics firm Arkham Intelligence