- Stablecoin legislation could be passed during Congress’ lame duck period.
- However, the market structure bill is less likely to be abandoned.
There is still some hope that Congress can advance US stablecoin laws before the end of the year.
Washington insiders say so DL News that Congress could tackle stablecoin laws during its current “lame duck” session, the period between elections and the start of a new Congress.
There is momentum for lawmakers to work on a bipartisan stablecoin bill, a source told The Hill. DL News.
Stablecoins have been a hot topic recently thanks to the introduction of new rules around the world and the entry of financial players like Stripe, PayPal and Robinhood into the sector.
According to a report released this week by the Digital Chamber, approximately $170 billion worth of stablecoins are in circulation worldwide, 98% of which are pegged to the dollar.
This rapid expansion presents both risks and opportunities for governments, and by failing to regulate the sector, the United States risks being left behind, the industry often laments.
Stablecoin Invoices
Democrats and Republicans on the House Financial Services Committee have been trying to craft a stablecoin bill for years.
A Republican version of this bill passed the committee and passed the House of Representatives in 2023 – but has remained there since.
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However, the committee’s top Democrat, Maxine Waters, said recently that she felt a sense of urgency about passing a bipartisan effort outside the House.
The committee’s chairman, Republican Patrick McHenry, is set to retire and may want to score one last political victory — especially since he has worked on this bill since the last Trump administration.
Even Senate Banking Committee Chairman and crypto skeptic Sherrod Brown has said he would pass stablecoin legislation if it comes before his committee.
What’s resisting is federal banking regulators, who want federal oversight of the sector, lobbyists say.
Treasury Secretary Janet Yellen has repeatedly said that Congress should provide a federal basis for regulating stablecoins.
The stablecoin laws were supposed to be an easy win for U.S. crypto regulation, with broad bipartisan agreement on their need to exist.
However, a major sticking point in the negotiations was that, generally speaking, Republicans wanted to make state regulators primarily responsible for stablecoins, while Democrats favored a framework that prioritized federal oversight.
FIT121 Law
Another bill to watch is the FIT21 Act, also known as the Market Structure Act.
This law would create a tailor-made regulatory framework for crypto, making the Commodity Futures Trading Commission its primary regulator.
The crypto industry sees the Fit21Act as a way out from under the yoke of stricter SEC rules.
FIT21 left the entire House of Representatives this summer.
However, lobbyists say Congress is less likely to tackle the market structure bill this year because it requires extensive revisions before it is fully ready.
Joanna Wright is a regulatory correspondent at DL News. Do you have any advice? Email to joanna@dlnews.com.
