Highlights from Financial Service Committee hearing on stablecoins
May. 18, 2023
By Samuel Wan
Lawmakers said they want to support stablecoins as a recognized payment method - however, the committee hearing highlighted a huge gap in lawmakers' understanding of the technology.
The Digital Assets Financial Technology Inclusion Committee held a hearing on May 18 to discuss stablecoin policy.
In opening the meeting, Congressman French Hill said it is the committee’s aim to put through legislation supporting stablecoins as a recognized payment method.
“We want for payment stablecoins to be used as a payment mechanism, which they’re really not today. The only way we can do that is by passing the appropriate regulatory framework”
Touching on the issue of anti-crypto sentiment at the governmental level, Congressman Hill clarified that committee members have the power to reverse the trend of U.S. crypto flight and “submit the U.S. as the leading place for safe payments innovation.”
“I look forward to our witnesses’ views on the two proposals and ultimately bring legal clarity and consumer protection to the stablecoin ecosystem.”
Finding bipartisan agreement on stablecoin regulation
In building on the previous stablecoin hearing that took place in September 2022, both parties submitted revised proposals addressing key points with a view to finding alignment on approving appropriate stablecoin regulation.
Some of the key points of concern include the speculative nature of stablecoins, which are primarily used for trading against cryptocurrencies, structural fragilities making them susceptible to runs, the roles of state versus federal regulators, the outcome of non-bank companies issuing stablecoins, how disclosures and attestations would operate, the role of the Fed, and safeguarding against threats to economic stability.
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