House legislation ‘best shot’ for digital dollar competition

Crypto industry players are optimistic that lawmakers could pass a new stablecoin law next year, they said during a financial conference in Washington, D.C.

“I think it is the best shot the U.S. has right now to compete in digital dollar currency,” Circle CEO Jeremy Allaire said.

The legislation is under discussion by the House Financial Services Committee. The bill would allow for private stablecoin issuers to register through financial regulators, provided they meet certain standards. The legislation would also require the Federal Reserve to report to Congress on the possibility of a central bank digital currency. 

The legislation “does a very good job of establishing what this new form of digital currency money is,” Allaire said. 

Allaire made his remarks at a fintech conference hosted by Georgetown Law School, alongside Crypto Council for Innovation CEO Sheila Warren and Bank of International Settlements Economic Adviser and Head of Research Hyun Song Shin. 

Warren, a major industry advocate, expressed optimism that the bill, which has stalled in committee, could “really solidify” in the next year. 

The Financial Stability Oversight Council, a committee of senior regulators chaired by Treasury Secretary Janet Yellen, released a report last week encouraging lawmakers to pass new stablecoin regulations. The move could give the legislation new momentum.

Shin believes there is a role for stablecoins in the financial ecosystem, but said they could look like banking products from a regulatory perspective. 

“If it looks like a bank deposit, if it actually works like a bank deposit, then it should be regulated like a bank deposit,” Shin said.

Banks are at different stages of internal discussion around stablecoins, Shin added. The BIS is not “here to foist some kind of agenda,” Shin said, but will “point out what’s feasible.”

“Banks are at different stages of internal discussion, different stages in the domestic debate,” Shin said. “I think there is a role for stablecoins in this ecosystem.”

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