Earlier this week, new draft legislation on stablecoins came to light aimed at “endogenously collateralized stablecoins.”
There is a small chance that the United States House of Representatives could pass the bill to regulate stablecoins by year-end, though it’s more likely it will pass in the first quarter of 2023, says U.S. Congressman Warren Davidson.
According to a Thursday report from Kitco, Davidson made the remarks at the Annual Fintech Policy Forum on Thursday, where he suggested:
“There’s an outside chance we find a way to get to consensus on a stablecoin bill this year.”
The “stablecoin bill” seemingly refers to draft legislation aimed at “endogenously collateralized stablecoins,” which came to light this week — and would place a two-year ban on new algorithmic stablecoins such as TerraUSD Classic (USTC).
However, Davidson went on to say that while “there’s a chance we get to yes on stablecoins this year,” it’s something that can be achieved by the first quarter of 2023.
“If we don’t, it's something that I think we can get to with a Republican majority in Q1 next year,” he said.
Davidson is widely seen as crypto-friendly and has previously introduced the Keep Your Coins bill, which aimed to protect self-custodied crypto wallets from U.S. government control.
A number of bills aimed at regulating stablecoins have been introduced in the U.S., such as the one that was introduced on Feb. 15 this year by U.S. Rep. Josh Gottheimer.
The director of the Consumer Financial Protection Bureau (CFPB), Rohit Chopra, also reportedly spoke at the event and believes that stablecoins have the potential for widespread adoption, noting:
“A stablecoin, riding the rails of a dominant payments system or a mobile OS, I think that could create ubiquity very quickly.”
Chopra added that if stablecoins do see this kind of rapid adoption, they could have a serious impact on global financial stability.
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The CFPB director also suggested that Washington may be neglecting other areas of fintech development due to its intense focus on crypto in recent months.
The forum was attended by financial giants such as Bank of America, Visa and Mastercard and was reportedly aimed at fostering discussion between executives and policymakers as to how they can work together to ensure developing technologies help businesses, consumers and the economy.
The current draft bill for stablecoins is being negotiated between House Financial Services Committee Chair Maxine Waters and the committee’s top Republican, Rep. Patrick McHenry.