US stablecoin bill delayed until after congressional recess

The bipartisan bill on stablecoin regulation in the United States has been pushed back by the House Financial Services Committee, according to a statement issued by committee Chairwoman Rep. Maxine Waters (D-CA).

The legislation will now have to wait until after Congress resumes from its August recess, Waters noted.

Although the Ranking Member, Secretary Yellen and I have made considerable progress towards an agreement on the legislation, we are unfortunately not there yet, and will therefore continue our negotiations over the August recess. It’s critical that we continue moving the ball forward on this so we can have a regulatory framework that protects consumers, while allowing for responsible innovation. I look forward to coming to an agreement in the near future and marking up bipartisan legislation when we return from recess.”

Crypto regulation spotlight

The move to push the bill back until after the August recess came on the day progress should have been made between the House Financial Services Committee Chairwoman and Ranking Member Rep. Patrick McHenry (R-NC).

Instead, Waters thanked McHenry and his staff for the collaboration extended during the last few days, noting that the effort targets an eventual “legislation that would better regulate stablecoins and require the Federal Reserve to research and develop a central bank digital currency, so we remain competitive globally.”

Regulatory scrutiny across the crypto sector, especially on stablecoins, has increased since the dramatic collapse of Terra’s algorithmic stablecoin UST. The depegging of the stablecoin opened up a full-blown contagion that has seen several crypto firms go bankrupt, adding fuel to previous regulation efforts.

For this particular US legislation, one of the main regulatory points focuses on stablecoin reserves, with the requirement that issuers such as Tether – the firm behind USDT – should have all the reserves backing the coin at 1:1 ratio at all times. 

Customers should also be able to redeem their holdings in such dollar-pegged tokens at all times.