Two senior members of the U.S. House of Representatives Financial Services Committee have emphasized the need to regulate stablecoins.
The members, one a Democrat and the other a Republican both agreed that stablecoin legislation is necessary.
They also confirmed that House Republicans, Democrats, and parts of the Biden administration are likely to come to an agreement on a path forward for a comprehensive framework for stablecoins.
In a proposed bill on Monday, both Republicans and Democrats agree that they don’t want a “race to the bottom” for guardrails around the digital assets.
“We do want to facilitate a state pathway, but to quote my colleagues on the other side of the aisle, we don’t want any race to the bottom,” said Rep. French Hill, R-Ark., a senior member of the Financial Services Committee in the U.S. House of Representatives.
Also speaking, Rep. Jim Himes, D-Conn., a senior Democrat on the Financial Services Committee said that it is possible to turn the bill into a law despite disparities in opinions on regulation of stblecoins at the state and federal level.
“We always have these arguments with the regulation of any financial product,” Himes said.
Further contributing, Hill said he wished it were possible for the House committees to have a comprehensive regulatory framework for stablecoins and crypto markets in the U.S. before the end of July.
Hope for a Regulatory Framework
The U.S. has been in the dark concerning clear regulations for the crypto industry. This has led to confusion on what is expected of crypto companies.
The lack of regulation is also at the root of the current court cases between the securities and exchange commission (SEC) and crypto exchanges.
However Himes has expressed optimism that a regulatory framework could be around the corner.
“The conversation happening right now is more between the committee and the regulators, and the conversations are happening I think formally and informally as we all work, I think, in good faith,” said the Connecticut Democrat.
He had also mentioned that proof of full one-to-one backing of stablecoins was the most important provision, indirectly referencing the high-profile Terra/Luna collapses last year.
Fed Chair Jerome Powell had also told congress last month that the central bank should play a role in regulating the payments tokens.
The Move Towards Stablecoin Regulation
The Terra/Luna collapse has attracted the attention of regulators and lawmaker like Himes who have since then been pushing for regulations for stablecoins. This is in line with the position of some crypto key players.
The CEO of Circle, the company that issues USDC stablecoin recently called for U.S. lawmakers to control and regulate stablecoins.
While acknowledging the role that stablecoins play in international trade, he also added that crypto assets like stablecoins can pose serious risks, and need to be other more stringent regulatory oversight.