- A law on stablecoins could pass during Congress’s “lame duck” period.
- However, the market structure bill is less likely to go.
There’s still a sliver of hope that Congress could advance US stablecoin laws before year-end.
Washington insiders tell DL News that Congress may tackle stablecoin laws during its current “lame duck” session, the period between an election and the start of a new Congress.
There is impetus for lawmakers to work on a bipartisan stablecoin bill, a source on The Hill told DL News.
Stablecoins have been a hot topic recently thanks to new rules being introduced across the world, and financial players like Stripe, PayPal and Robinhood stepping into the sector.
About $170 billion worth of stablecoins are in circulation worldwide, with 98% of those pegged to the dollar, says a report published this week by the Digital Chamber.
This quick expansion presents both risks and opportunities for governments, and by failing to regulate the sector, the US risks being left behind, the industry often laments.
Stablecoin bills
Democrats and Republicans in the House Financial Services Committee have tried to hammer out a stablecoin draft law for years.
A Republican version of this bill passed out of the committee into the full House of Representatives in 2023 — but has languished there since.
However, the committee’s top Democrat Maxine Waters said recently she felt a sense of urgency about passing a bipartisan effort out of the House.
Committee chair Republican Patrick McHenry is set to retire, and may want to go out with one last policy win — especially as he’s worked on this bill since the last Trump administration.
Even Senate Banking committee chair and crypto sceptic Sherrod Brown has said he would pass stablecoin legislation if it came to his committee.
The holdout is the federal banking regulators, who want federal oversight of this sector, lobbyists say.
Treasury Secretary Janet Yellen has repeatedly said Congress should provide a federal base for stablecoin regulation.
The stablecoin laws were supposed to be an easy win for US crypto regulation, with broad bipartisan agreement that they needed to exist.
However, a major sticking point in negotiations was that, broadly, Republicans wanted to make state regulators primarily responsible for stablecoins, while Democrats favoured a framework prioritising federal oversight.
FIT121 Act
Another draft law to keep an eye on is the FIT21 Act — also known as the market structure act.
This law would create a tailored regulatory framework for crypto, making the Commodity Futures Trading Commission its primary regulator.
The crypto industry sees the Fit21Act as a way to get out from under the yoke of stricter SEC rules.
FIT21 passed out of the full House of Representatives this summer.
However, lobbyists say Congress is less likely to tackle the market structure bill this year, as it requires extensive revisions before it’s fully ready.
Joanna Wright is a Regulation Correspondent at DL News. Got a tip? Email at joanna@dlnews.com.
