Yesterday, the Senate Banking Committee’s Digital Asset Subcommittee had its first meeting and it was no surprise that stablecoins were at the forefront.
Cynthia Lummis who is chairing the newly-formed subcommittee said that legislation on stablecoins was their top priority. Following this will be a market structure legislation, on which there was some movement during the last session.
“We’re on the precipice of finally creating a bipartisan legislative framework for both stablecoins and market structure,” “She said”
Timothy Massad was a former CFTC chair and a member of the panel who testified during this hearing. He advised that lawmakers focus on stablecoins. It is best to delay market structure legislation until answers are found for fundamental questions.
“Market structure regulation requires resolving some complex regulatory boundaries, including when is a digital asset a security, a commodity, both or neither?” He said. “There is a risk that we will significantly undermine the securities law framework that has served this country so well and has made our securities markets the envy of the world.”
Commentary comes as industry speculates on what the bill for stablecoins might look like. Lummis’ GENIUS Act was introduced along with Democratic Senator Kirsten Gilibrand. “payment stablecoins” The fiat currency must be backed 1:1 by registered issuers “or other secure reserves.”
The industry, and the two parties, agree that these terms are generally acceptable, but details can be a little more difficult to work out. Democrat Mark Warner said yesterday that he has seen “a whole bunch of bad stuff” And is calling for stronger KYC requirements.
If the GENIUS Bill progresses, it is likely that we will see a second hearing of the Senate Banking Committee.
It is not known when or if this will happen.
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