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Financial Services Committee Examines Legislation to Create A Framework for Payment Stablecoins
Washington, Mar 11 -
The House Financial Services Committee, led by Chairman French Hill (AR-02), held a hearing entitled, "Examining a Federal Framework for Payment Stablecoins and Consequences of a U.S. Central Bank Digital Currency." The hearing examined the promise of blockchain technology, specifically in payments with stablecoins and discussed how the Committee’s STABLE Act will impact payment stablecoin issuers, protect consumers, and foster competition and innovation. Members of the Committee also examined the harmful effects of a potential government-controlled CBDC and highlighted Republican efforts to prohibit a U.S. CBDC.
Watch the hearing online HERE.
View Chairman Hill’s opening statement HERE or below.
As part of the hearing, the Committee reviewed several bills that would support America's leadership on digital assets. A full list of the attached bills can be found HERE.
In support of the STABLE Act:
- “A properly regulated stablecoin market can strengthen the U.S. dollar’s dominance, modernize our payments infrastructure, and promote financial access without government overreach. It is essential that we are deliberate and get this job done and done right,” said Chairman Hill.
On the harm a U.S. CBDC would have on American consumers:
- “I’m grateful to this committee for noticing my bill, the Anti-CBDC Surveillance State Act, in this hearing today. The bill is simple. It halts the effort of unelected bureaucrats from ever issuing a Central Bank Digital Currency that could upend the American way of life. …CBDC’s introduce significant privacy risks and are fundamentally the antithesis of American values,” said House Majority Whip Tom Emmer (MN-06).
On the benefits of stablecoins:
- “Stablecoins hold immense potential. ...The capacity to simplify our payment system is going to be huge. ...There is a moment here for us in Congress to act. As legislators it is ultimately up to us to provide the regulatory clarity needed to ensure that the U.S. dollar remains the dominant reserve currency, and I believe stablecoins can do that,” said Rep. Bill Huizenga (MI-04).
On the importance of a regulatory framework for digital assets:
- “A strong legislative framework will give entrepreneurs and investors and businesses the certainty they need to innovate without fear of regulatory overreach or shifting political agendas. Without clear laws, the digital asset industry remains vulnerable to arbitrary enforcement actions that stifle growth and push talent overseas,” said Rep. Timmons (SC-04).
Witnesses echoed their support for the work of the Committee.
- Caroline Butler, Global Head of Digital Assets, The Bank of New York Mellon Corporation, stated, “In the absence of a unified federal framework governing stablecoins, participants in stablecoin arrangements look to various state and federal laws, licensing, and chartering regimes. We commend this Committee for its work to develop a targeted federal framework that addresses threshold questions such as who can issue stablecoins, who can hold stablecoin reserves and the types of assets that comprise those reserves, and how to promote consumer protection through principles such as asset segregation, reserve attestation, and transparency.”
- Charles Cascarilla, Co-Founder and CEO, Paxos, added, "I want to thank Chair Hill and Representative Steil personally for their work to develop the STABLE Act. The STABLE Act represents a historic opportunity to cement America’s leadership in digital finance. We strongly support its core framework, particularly its clear distinction between stablecoin issuance and traditional banking. Stablecoin issuers like Paxos do not take deposits or make loans; we facilitate payments and asset transfers. Designating the Office of the Comptroller of the Currency (OCC) as the federal regulator for non-bank issuers is the right choice, aligning oversight with the unique nature of our operations."
- Patrick Collison, Co-Founder and CEO, Stripe, commented, “We see other countries (e.g. in Europe) already putting their legal frameworks into motion to regulate stablecoins. The U.S. should move quickly and seize the opportunity to lead on global standards for stablecoin and payments regulation, reinforcing dollar dominance and ensuring American companies remain at the forefront of financial innovation.”
- Randall Guynn, Chairman, Financial Institutions Group, Davis Polk & Wardwell, commented, “The proposed regulatory framework for payment stablecoins appears to have been modeled on the framework for regulating, examining and supervising the dual banking system. This framework has existed in one form or another since the enactment of the National Bank Act in 1863. As a result of its long existence, the framework for regulating, examining and supervising banks under the dual-banking system is well understood. The STABLE Act seems to reflect the time-honored principles that if it ain’t broke, don’t try to fix it and don’t reinvent the wheel.”